Which one of the following would most likely shift the upward-sloping aggregate supply curve upwards and to the left?
A) The government reduces marginal tax rates.
B) The overall productivity of labour falls.
C) The level of planned investment spending falls.
D) Households begin to consume more out of each pound of income that they receive.

Question

Quizplus · Accepted Answer

A decrease in the overall productivity of labor would likely increase production costs for businesses, leading to a decrease in the quantity of goods and services supplied at any given price level. This scenario would shift the aggregate supply curve upwards and to the left, indicating a reduction in supply.

Which One of the Following Would Most Likely Shift the Upward-Sloping