Which Is a Basic Proposition of Supply-Side Economics

question 180

Multiple Choice

Which is a basic proposition of supply-side economics?

• A) The Federal Reserve should target the federal funds rate rather than the money supply.
• B) Tax-hikes on business reduce productivity and output and reduce aggregate supply.
• C) Low marginal tax rates reduce incentives to work, saving, and investment.
• D) Transfer payments increase incentives to work.

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Definitions:

Maturation process

The developmental process by which individuals reach physical and psychological maturity, encompassing both natural growth and learned behavior.

Pound for pound

A comparison term used to describe the strength or value of something relative to its weight.

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The amount of iron, a vital mineral for human health, present in certain substances or objects.

Infant formula

A manufactured food designed and marketed for feeding to babies and infants under 12 months of age, usually prepared for bottle-feeding or cup-feeding from powder or liquid.