What effect can natural disasters have on aggregate supply?

Natural disasters can significantly disrupt economic activity, primarily by causing destruction to physical assets and infrastructure. When a natural disaster occurs, it often leads to the damage or destruction of buildings, machinery, and other forms of capital necessary for production. This destruction can result in a substantial decrease in the economy's overall production capacity, as businesses may temporarily shut down or take a considerable amount of time to rebuild and recover.

As a result, the economy may experience a shift in aggregate supply, leading to higher prices and reduced output until the destroyed capital is replaced and production capabilities are restored. Therefore, the assertion that natural disasters may lead to the destruction of capital affecting production accurately reflects the detrimental impact these events can have on the aggregate supply curve.