Which of the following supply shocks would shift the long-run aggregate supply curve outward?
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 would lead to a decrease in the cost of raw materials for food production, which would lower input costs for firms and shift the long-run aggregate supply curve outward. The other choices would lead to an increase in costs for firms, causing the long-run aggregate supply curve to shift inward.

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