Question

Good weather and heavy winter rain increases the supply of agricultural products. This means that at any given price, a higher quantity will be supplied. Conversely, a drought would shift the Select one: a. demand curve to the left. b. demand curve to the right. C. supply curve to the left. d. supply curve to the right

please list the correct answer and why?
Thank you

Answer 1

1 Supply curve will shift to left. If the supply of the good increases then supply curve shift to the right and if supply of good decreases supply curve shift to the left, other things being equal.Drought will decrease the supply of agricultural products, causing the supply curve to shift to the left.

2.Excess Supply. When the price is higher than the equilibrium price then the quantity supplied is more than the quantity demanded. This is because at higher price, producers will try to make more profit by supplying more quantity.

3.Monetary Policy. It is a tool used by central bank to control money supply in the market.It uses interest rate and credit to control money supply in the market. Lower interest rate are used to expand money supply in the market to generate demand and higher interest rates are used to tighten the money supply in the market to cut the consumer spending.

4. A positive statement can be shown to be correct or incorrect. It can be proved whether it is valid or not. Suppose if i say that inflation rate in US for 2019 is 2%. This can be proved to be true or false by looking and analyzing the statistical data.