Multiple Choice Question

Raising business taxes shift the Blank______.
Multiple choice question.

aggregate demand curve to the left

long-run aggregate supply curve to the left

short-run aggregate supply curve to the right

aggregate demand curve to the right

1 answer

Raising business taxes shifts the short-run aggregate supply curve to the left.

Higher taxes on businesses increase their costs, which can lead to a decrease in the quantity of goods and services supplied at any given price level, thereby shifting the short-run aggregate supply curve leftward.