Which of the Following Propositions Would a Proponent of Supply-Side

question 13

Multiple Choice

Which of the following propositions would a proponent of supply-side economics be most likely to stress?

• A) Because they expand government revenues, higher marginal tax rates will lead to a reduction in the budget deficit and to lower interest rates.
• B) Because they encourage investors to undertake low-productivity projects with substantial tax-avoidance benefits, higher marginal tax rates promote economic inefficiency.
• C) Because they do not consume resources directly, income redistribution payments will exert little impact on real aggregate supply.
• D) The primary impact of a tax reduction on aggregate supply will stem from the influence of the tax change on the size of the budget deficit or surplus.

---

Definitions:

Current Drinkers

Individuals who have consumed alcohol within a specified recent period and continue to do so.

Binge Drinking

Refers to the heavy consumption of alcohol in a short period of time, often leading to significant impairment.

Cognitive Deficits

A noticeable decline in cognitive abilities, including memory, decision-making, attention, and problem-solving skills.

Impaired Coordination

A reduction in the ability to perform movements with the normal level of precision and fluidity, possibly due to neurological or musculoskeletal issues.