One Implication of the Laffer Curve in Supply-Side Arguments Is

question 113

True/False

One implication of the Laffer Curve in supply-side arguments is that cutting taxes may actually reduce the budget deficit, contrary to what traditional economics teaches.

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Definitions:

Discretionary Policy

Refers to economic strategies and actions, such as changes in tax rates or government spending, opted by the government to manage the economy.

Passive Approach

An investment strategy that involves minimal buying and selling actions, typically focused on long-term investment in index funds and other diversified holdings.

Expansionary Monetary Policy

A policy by central banks to increase the money supply and decrease interest rates to stimulate economic growth.

Real Output

The measure of goods and services produced by an economy, adjusted for inflation or deflation, showing true growth or contraction.