If Congress passed new laws signiﬁcantly increasing the regulation of business, this action would tend to
A) increase per-unit production costs and shift the aggregate supply curve to the left.
B) increase per-unit production costs and shift the aggregate supply curve to the right.
C) increase per-unit production costs and shift the aggregate demand curve to the left.
D) decrease per-unit production costs and shift the aggregate supply curve to the left

Question

Quizplus · Accepted Answer

Increased regulation typically increases production costs as businesses must comply with new rules and regulations. This would shift the aggregate supply curve to the left as firms would be willing to supply fewer goods and services at any given price level.

If Congress Passed New Laws Signiﬁcantly Increasing the Regulation of Business