Which of the following will shift the aggregate supply curve...

Which of the following will shift the aggregate supply curve to the right?
a. A new networking technology increases productivity all over the economy.
b. The price of oil rises substantially.
c. Business taxes fall.
d. The government passes a law doubling all manufacturing wages.

Key Concepts

Aggregate Supply Curve

The aggregate supply curve represents the total output of goods and services that firms in an economy are willing and able to produce at a given overall price level. It can shift due to changes in production costs, resource availability, technological improvement, or policies affecting the cost of production, independent of short-run price movements.

Technological Advancements and Productivity

Technological improvements and increases in productivity allow firms to produce more output with the same input, effectively reducing the cost per unit of production. This expansion in productive capacity shifts the aggregate supply curve to the right, indicating an increased potential output in the economy.

Input Prices

Input prices, which include the cost of raw materials, energy, and labor, are a key determinant of production costs. A decrease in input prices reduces production costs, allowing firms to supply more at each price level, thereby shifting the aggregate supply curve to the right. Conversely, increases in input prices can shift it to the left, reducing output.

Business Taxes

Business taxes affect the cost structure of firms. When business taxes are lowered, the cost of production decreases, which incentivizes businesses to increase output. This lower cost of production allows more goods and services to be supplied at any given price level, resulting in a rightward shift of the aggregate supply curve.

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