Question

Identify how each of the scenarios affects short‑run aggregate supply.

a. The U.S. government increases the minimum wage.
b. Widespread adoption of the Internet by businesses increases productivity and efficiency.
c. The government decreases the payroll tax paid by employers.
d. The U.S. government decreases the personal income tax rate paid by households.

WORD BANK
- increase
- decrease
- no change

Answer 1

A.

Step-by-step explanation:

The U.S. government increases minimum wage. Widespread adoption of the Internet by businesses increases productivity and efficiency. The government decreases the payroll tax paid by employers. A financial crisis causes businesses to anticipate a recessionary economy within the coming months. The U.S. government decreases the personal income tax rate paid by households. Answer Bank decrease no change increase