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Which of the following changes in economic circumstances will decrease short-run aggregate...

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Which of the following changes in economic circumstances will decrease short-run aggregate supply?

a. a decrease in the corporate income tax

b. an increase in wages

c. a decrease in the power of labor unions

d. a substantial increase in oil production by OPEC

Aggregate Supply Curve

The aggregate supply curve explains the relationship between the price level in the economy and the supply of all the goods and services produced. The aggregate supply curve can be defined in short-run terms or in long-run terms.

Answer and Explanation: 1

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  • The correct answer is: a). a decrease in the corporate income tax

a. a decrease in the corporate income tax

In the short-run, the aggregate supply...

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Aggregate Supply in the Economy: Definition and Determinants

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Chapter 7 / Lesson 7
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Learn the definitions of aggregate supply and aggregate demand. See the determinants of aggregate supply, the determinants of aggregate demand, and what causes them to shift.


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