Which of the following supply shocks will shift the long-run aggregate supply curve rightward?
A) an increase in business taxes
B) an increase in gasoline taxes
C) an increase in the cost of raw materials
D) an increase in the amount and cost of government regulation
E) an increase in agricultural output

Question

Quizplus · Accepted Answer

An increase in agricultural output will increase the availability of resources and thus shift the long-run aggregate supply curve rightward. The other options, such as an increase in taxes, costs, or regulations, are likely to increase production costs and decrease the availability of resources, leading to a leftward shift in the long-run aggregate supply curve.

Which of the Following Supply Shocks Will Shift the Long-Run