According to supply-side theory,which of the following would cause a rightward shift in the aggregate supply curve?
A)Eliminating job search assistance.
B)Increasing transfer payments to the unemployed.
C)Eliminating government-funded training programs for the structurally unemployed.
D)Lifting trade restrictions.

Question

Quizplus · Accepted Answer

Lifting trade restrictions would lead to an increase in economic activity, as it would make it easier for businesses to trade with other countries, which would increase the supply of goods and services in the economy. This would cause a rightward shift in the aggregate supply curve, resulting in an increase in real GDP and a decrease in the price level. The other options, such as eliminating government-funded training programs or increasing transfer payments to the unemployed, would likely lead to a decrease in economic activity, and thus a leftward shift in the aggregate supply curve.

According to Supply-Side Theory,which of the Following Would Cause a Rightward