An increase in business excise taxes will shift the aggregate supply curve leftward.

Question

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Business excise taxes are a type of tax on the production or sale of goods and services. When these taxes increase, the cost of production increases for businesses, causing a decrease in profit margins which can shift the aggregate supply curve leftward. This shift indicates a decrease in the quantity of goods and services supplied at every price level.

An Increase in Business Excise Taxes Will Shift the Aggregate