Asked by Nelli Vartanian on Jun 06, 2024
Verified
The aim of supply-side economics is to:
A) increase government spending to stimulate aggregate supply.
B) stimulate exports to increase the balance of payments.
C) decrease wages to make production cheaper.
D) lower taxes to increase the supply of resources.
E) reduce both the inflation and unemployment problems through increases in taxes.
Supply-Side Economics
An economic theory that advocates reducing taxes and regulations to stimulate production and economic growth.
Lower Taxes
A reduction in the amount of taxes imposed by a government, which can encourage economic growth by increasing consumers' and businesses' disposable income.
Aggregate Supply
The total supply of goods and services that firms in an economy are willing and able to sell at a given price level during a specific time period.
- Comprehend the outcomes of supply-side economics, particularly the effects that reducing taxes has on the aggregate supply.
Verified Answer
SA
Salah AltamimiJun 09, 2024
Final Answer :
D
Explanation :
The aim of supply-side economics is to increase the supply of resources, which can be achieved through lowering taxes, providing incentives for investment and entrepreneurship, and reducing regulations on businesses. The idea is that by making it easier and cheaper for businesses to produce goods and services, they will increase their output and create more jobs, ultimately leading to economic growth. Lowering taxes is one of the main strategies used in supply-side economics to increase the supply of resources.
Learning Objectives
- Comprehend the outcomes of supply-side economics, particularly the effects that reducing taxes has on the aggregate supply.