Which of the Following Is Most Likely to Increase Aggregate

question 3

Multiple Choice

Which of the following is most likely to increase aggregate supply?

• A) An increase in safety regulations.
• B) A decrease in the capital gains tax.
• C) An increase in the minimum wage.
• D) An increase in government borrowing.

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Definitions:

Advertising Elasticity of Demand

The responsiveness of the quantity demanded of a good to a change in the amount of advertising for that good.

Marginal Cost of Production

The change in total production costs that comes from making or producing one additional item.

Advertising Elasticity of Demand

Measures the responsiveness of the quantity demanded of a good or service to a change in the level of advertising for that good or service.

Rule of Thumb

A general principle that provides practical instructions for accomplishing or approaching a certain task.