Which of the following will cause an increase in aggregate supply?
A)decreased competition
B)an increase in the price level
C)an increase in marginal tax rates
D)a decrease in input prices

Question

Quizplus · Accepted Answer

A decrease in input prices will decrease the cost of production for firms, which will lead to an increase in aggregate supply. This is because firms can produce more output while keeping their prices the same or lower, resulting in an increase in the quantity of goods and services supplied. Decreased competition, an increase in the price level, and an increase in marginal tax rates will all have the opposite effect, leading to a decrease in aggregate supply.

Which of the Following Will Cause an Increase in Aggregate