Supply-side policies can be described in terms of the aggregate demand and aggregate supply model as an attempt to shift
A) the aggregate demand curve to the right.
B) the aggregate supply curve to the right.
C) both the aggregate supply curve and the aggregate demand curve to the right.
D) the aggregate supply curve to the right and the aggregate demand curve to the left.

Question

Quizplus · Accepted Answer

Supply-side policies aim to increase the production capacity and efficiency of the economy, leading to an increase in the aggregate supply. This is represented by a shift of the aggregate supply curve to the right, resulting in lower prices and higher output. There is no direct effect on the aggregate demand curve.

Supply-Side Policies Can Be Described in Terms of the Aggregate