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:

Peripheral Vasodilatation

The expansion of blood vessels in the outer parts of the body, which can increase blood flow and decrease blood pressure.

Cardiac Output

The volume of blood the heart pumps through the circulatory system in one minute, an important measure of heart function.