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(Figure: Determining SRAS Shifts) If the Government Raises Taxes

Question 98

Multiple Choice

(Figure: Determining SRAS Shifts) (Figure: Determining SRAS Shifts) If the government raises taxes or increases regulations, the short-run aggregate supply curve will shift from SRAS<sub>0</sub> to _____, and the price level will be at _____. A) SRAS<sub>1</sub>; P<sub>0</sub> B) SRAS<sub>1</sub>; P<sub>1</sub> C) SRAS<sub>2</sub>; P<sub>1</sub> D) SRAS<sub>2</sub>; P<sub>2</sub> If the government raises taxes or increases regulations, the short-run aggregate supply curve will shift from SRAS0 to _____, and the price level will be at _____.


A) SRAS1; P0
B) SRAS1; P1
C) SRAS2; P1
D) SRAS2; P2

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