Supply-side policy is designed to
A)Move the economy from a point inside the production possibilities curve to a point on the curve and shift the aggregate supply curve to the left.
B)Move the economy from a point inside the production possibilities curve to a point on the curve and shift the aggregate supply curve to the right.
C)Shift the production possibilities curve outward and shift the aggregate supply curve to the left.
D)Shift the production possibilities curve outward and shift the long-run aggregate supply curve to the right.

Question

Quizplus · Accepted Answer

Supply-side policies are aimed at increasing productivity and efficiency in the economy, which in turn shifts the production possibilities curve outward, indicating an increase in potential output. Similarly, these policies shift the long-run aggregate supply curve to the right, reflecting an increase in the economy's capacity to produce goods and services.

Supply-Side Policy Is Designed to