Narrbegin Exhibit 17.4 Aggregate demand and supply curves -In Exhibit 17.4, supply-siders claimed that the shift from AS₁ to AS₂ would occur if the government: A) increased tax rates and increased the amount of government regulation. B) increased tax rates and decreased the amount of government regulation. C) increased tax rates only. D) decreased tax rates and decreased the amount of government regulation.

Question

Quizplus · Accepted Answer

According to supply-siders, the shift from AS₁ to AS₂ would occur with a decrease in tax rates and a decrease in the amount of government regulation. This would increase the incentives for producers to supply more goods and services, leading to an increase in aggregate supply.