Which of the following is most likely to cause the aggregate supply curve to shift to the right?
A)An increase in the money supply.
B)A one-time tax rebate.
C)A decrease in marginal tax rates.

Question

Quizplus · Accepted Answer

A decrease in marginal tax rates would increase the incentive for firms to produce more, as they will be able to keep a larger share of their profits. This increased production would lead to an overall shift in the aggregate supply curve to the right. An increase in the money supply would lead to inflation and a shift to the left of the short-run aggregate supply curve. A one-time tax rebate would increase disposable income and potentially increase consumption, but it would not necessarily lead to a shift in the aggregate supply curve.

Which of the Following Is Most Likely to Cause the Aggregate