Which would most likely increase aggregate supply?

1) which of the following would most likely increase aggregate supply? a) an increase in the prices of imported goods b) an increase in productivity c) an increase in government subsudies to business d) a decrease in net exports 2) One reason why the aggregate supply curve might shift to the left is that: a) consumer incomes have increased b) production costs have increased c) government spending has increased d) businesses have become more optimistic 3) A reduction in taxes may: a) increase aggregate demand and decrease aggregate supply b) increase aggregate demand and increase aggregate supply c) decrease aggregate demand and decrease aggregate supply d) decrease aggregate demand and increase aggregate supply

Answer

Hi, 1. Increase in productivity: Explanation: Worker productivity is an aggregate supply function. An increase in worker productivity will cause the short run aggregate supply curve to shift to the right. ——— 2. production costs have increased Explanation: Increase in production cost will lead to a lower margins for the producers; hence the AS will decrease —– 3. increase aggregate demand and decrease aggregate supply

Explanation:  An increase in taxation tends to reduce aggregate supply while By reducing taxes the aggregate demand curve will shift to the right.

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