Which of the following shifts the aggregate supply curve?
A)an increase in the price of oil
B)a change in the previous period's inflation rate
C)higher taxes on firms
D)all of the above
E)an increase in government expenditure

Question

Quizplus · Accepted Answer

- An increase in the price of oil increases production costs for firms, causing a leftward shift in the aggregate supply curve.
- A change in the previous period's inflation rate affects firms' expectations about future inflation and may cause a shift in the short-run aggregate supply curve.
- Higher taxes on firms decrease their after-tax profits, which reduces investment and causes a leftward shift in aggregate supply.

Which of the Following Shifts the Aggregate Supply Curve