An increase in net indirect taxes will shift the aggregate supply curve upwards to the left.

Name: An increase in net indirect taxes will shift the aggregate supply curve upwards to the left.
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Question

Quizplus · Accepted Answer

An increase in net indirect taxes raises the cost of production for businesses, leading to a decrease in the aggregate supply. This is represented by an upward (or leftward) shift of the aggregate supply curve, indicating a reduction in the quantity supplied at each price level.

An Increase in Net Indirect Taxes Will Shift the Aggregate