Reference no: EM133461126

Case Study: In August 2022, the Inflation Reduction Act was passed. The intent of this Act is to "lower energy costs for families and small businesses, accelerate investment in clean energy solutions..., strengthen supply chains ... from critical minerals to efficient electric appliances, and create good-paying jobs and new economic opportunities for workers."The Act includes federal funding for clean energy through tax incentives, grants, and loan guarantees; loan guarantees to upgrade or replace energy infrastructure; tax credits to catalyze private investment in clean energy, transport, and manufacturing; and tax credits for households to make electric vehicles (EVs), energy-efficient appliances, rooftop solar panels, geothermal heating, and home batteries more affordable.[2]

Question: Which curve(s) is this Act intended to shift, and in which direction in the Aggregate Demand-Aggregate Supply model? Explain. (Assume all else is constant, and only look at the effects of this Act).