Which of the following supply shocks would shift the aggregate supply curve inward?
A)A decrease in business taxes
B)A decrease in gasoline taxes
C)A decrease in the cost of raw materials
D)A decrease in agricultural output
E)A decrease in the amount and cost of government regulation

Question

Quizplus · Accepted Answer

A decrease in agricultural output would decrease the supply of raw materials used in food production, causing an increase in their cost and reducing the amount of goods and services that can be produced at any given price level, shifting the aggregate supply curve inward. The other choices would increase the supply of goods and services, shifting the aggregate supply curve outward.

Which of the Following Supply Shocks Would Shift the Aggregate