According to supply-side theory,which of the following would shift the aggregate supply curve leftward?
A)An increase in unemployment and welfare benefits.
B)Lower marginal tax rates.
C)Government deregulation.

Question

Quizplus · Accepted Answer

An increase in unemployment and welfare benefits would increase the costs of production for firms, as they would have to pay higher wages and benefits to workers. This would lead to a decrease in aggregate supply, shifting the curve leftward. Lower marginal tax rates and government deregulation would likely have the opposite effect, shifting the curve rightward.

According to Supply-Side Theory,which of the Following Would Shift the Aggregate