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Influence of healthy rainfall on farm yield on the short-run aggregate supply curve and the macroeconomic equilibrium.
Short-run Aggregate Supply Curve: In the scenario of healthy rainfall leading to greater farm yield, this would result in an increase in agricultural production. As per the concept of the short-run aggregate supply curve, an unusually good harvest, such as this, would shift the supply curve to the right, indicating an increase in output.
Aggregate Supply and Demand Model: When there is a positive event like healthy rainfall causing greater farm yield, it would lead to an increase in aggregate supply. This increase in supply aligns with an outward shift in the short-run aggregate supply curve, showcasing the relationship between output levels and price levels.
Macroeconomic Equilibrium: The increase in farm yield due to healthy rainfall represents a supply-side factor affecting the economy. The resultant increase in output from the agricultural sector would contribute to shifting the aggregate supply curve to the right, showcasing a positive impact on the economy.
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