A Basic Criticism of Supply-Side Economics Is That

question 151

Multiple Choice

A basic criticism of supply-side economics is that

• A) empirical research clearly shows that incentives to work and invest vary directly with marginal tax rates.
• B) lower taxes will increase aggregate supply much more than they will increase aggregate demand.
• C) lower taxes will increase aggregate demand much more than they will increase aggregate supply.
• D) higher taxes will reduce incentives to work, invest, and innovate.

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Definitions:

China

The world's most populous country, located in East Asia, known for its rich history, significant economic power, and rapid modernization and development in recent decades.

Increasing

A process or trend characterized by a growth or rise in quantity, size, or intensity.

Income Distribution

The way in which a nation’s total income is distributed among its population.

Inequality

A term referring to uneven distribution of income, wealth, opportunities, and social status among different groups in society.