Supply-Side Economic Theory

question 39

Multiple Choice

Supply-side economic theory:

• A) Predicts that a decrease in the highest income tax rates will cause an increase in government revenues.
• B) Is inconsistent with the substitution effect.
• C) Was a clear failure following the Reagan administration tax cuts of the 1980s.
• D) Predicts that taxpayers will save their tax windfall from a rate cut rather than spend or investment the windfall.

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Definitions:

Collective Intelligence

The shared or group intelligence that emerges from the collaboration, collective efforts, and competition of many individuals, often leading to innovative solutions and decision making.

Right Questions

Strategic inquiries designed to elicit valuable information, facilitate understanding, or uncover underlying issues in a conversation or investigation.

Pygmalion Effect

Leader’s ability to elevate workers’ performance by the simple method of expecting them to perform well; the manager’s high expectations become a self-fulfilling prophecy.

Level of Performance

The degree or standard of efficiency, proficiency, or achievement in carrying out a task or action.