Which of the following supply shocks would shift the aggregate supply curve inward?
A)a decrease in business taxes
B)a decrease in gasoline taxes
C)a decrease in the cost of raw materials
D)a decrease in agricultural output
E)a decrease in the amount and cost of government regulation

Question

Quizplus · Accepted Answer

A decrease in agricultural output would lead to an increase in the cost of raw materials, which would increase production costs for firms and shift the aggregate supply curve inward. The other options would either decrease production costs or increase productivity, shifting the aggregate supply curve outward.

Which of the Following Supply Shocks Would Shift the Aggregate