Which of the following is an accurate statement about supply-side policy?
A)The aggregate supply curve should be shifted to the right during periods of inflation and to the left during a recession.
B)The aggregate supply curve should be shifted to the left during periods of inflation and to the right during a recession.
C)The aggregate supply curve should be shifted to the right during periods of both inflation and recession.
D)The aggregate supply curve should be left alone.

Question

Quizplus · Accepted Answer

Supply-side policy aims to increase the productive capacity of the economy, shifting the aggregate supply curve to the right. This is beneficial during both inflation and recession by potentially reducing inflationary pressure and increasing output and employment, respectively.

Which of the Following Is an Accurate Statement About Supply-Side