Final answer:
Supply-side economists argue that government can promote rightward shifts in the AS curves through changes in tax policy, as it influences production costs and the incentive for businesses to invest and for individuals to work. Option C is correct.
Step-by-step explanation:
According to supply-side economists, the government can promote or impede rightward shifts of the short-run and long-run Aggregate Supply (AS) curves through changes in tax policy. When the government implements policies that lower taxes, it can reduce the cost of production for businesses. This in turn can increase the incentives for investment and work, leading to an expansion of supply.
Conversely, higher taxes increase production costs, which can diminish supply. Therefore, out of the options given, tax policy is the one through which the government can significantly influence the shifts of the AS curves in the short run and the long run. This aligns with the idea that government policies affect economic outcomes substantially through their influence on costs, including production costs impacted by taxes and regulations.