An economist worrying about the economic impact of environmental regulations would model that impact with
A)a decrease in aggregate supply.
B)a decrease in aggregate demand.
C)an increase in aggregate supply.
D)an increase in aggregate demand.

Question

Quizplus · Accepted Answer

Environmental regulations often require businesses to restrict their production and use of resources, which can lead to higher production costs and lower profits. In turn, this can cause a decrease in aggregate supply as businesses are not able to produce as much output as before.

An Economist Worrying About the Economic Impact of Environmental Regulations