If business taxes decrease, economists would say that this was a positive demand shock that shifts AD to the left. positive demand shock that shifts AD to the right. positive demand shock that shifts SRAS to the right. positive supply shock that shifts SRAS to the right. positive supply shock that shifts SRAS to the left.

Positive supply shock that shifts SRAS to the right.

Explanation:

There are different factors that affect this but primarily its seen that change in input price and also productivity are the two vital factors.

Normally, the AS curve is defined as showing the quantity of real GDP producers will supply at any aggregate price level.

Supply shocks are events that shift the aggregate supply curve. When the aggregate supply curve shifts to the right, then at every price level, a greater quantity of real GDP is produced. This is called a positive supply shock. When the AS curve shifts to the left, then at every price level, a lower quantity of real GDP is produced. This is a negative supply shock.

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