All items below will decrease short-run aggregate supply EXCEPT
A) a decrease in the marginal tax rates.
B) an increase in the prices of inputs.
C) a decrease in training and education.
D) a decrease in labor supply.

Question

Quizplus · Accepted Answer

A decrease in marginal tax rates would provide an incentive for businesses to increase investment and production, thereby increasing short-run aggregate supply. The other options, such as an increase in the prices of inputs, a decrease in training and education, and a decrease in labor supply, would all decrease short-run aggregate supply by increasing production costs or reducing the availability of productive resources.

All Items Below Will Decrease Short-Run Aggregate Supply EXCEPT