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Which of the following will most likely result from unfavorable weather conditions in agricultural areas in...

Which of the following will most likely result from unfavorable weather conditions in agricultural areas in the short-run? Group of answer choices

A. a decrease in unemployment

B. a decrease in inflation

C. an increase in the natural rate of unemployment

D. an increase in the GDP Deflator

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Answer #1

Answer: D. An increase in the GDP Deflator

The GDP deflator is an implicit price index, which is used to measure the inflation in an economy. The unfavorable weather conditions in agricultural areas will hamper the agricultural production, which in turn will reduce the aggregate supply of agricultural goods.As a result, the general price level in the economy will rise. So for unfavorable weather conditions in agricultural areas, the GDP deflator will rise.

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