Supply-side economists argue that decreasing marginal tax rates
A) increases productivity and shifts the AS curve to the right.
B) increases productivity and shifts the AS curve to the left.
C) increases productivity and shifts the AD curve to the left.
D) due to the Ricardian equivalence, has no impact on the economy.
Ans: A) increases productivity and shifts the AS curve to the right.
You might also like to view...
According to classical theory, any changes in aggregate demand will
A) have no affect on prices or real Gross Domestic Product (GDP). B) lead to changes in both real Gross Domestic Product (GDP) and the price level. C) lead to changes in the price level. D) lead to changes in real Gross Domestic Product (GDP), but not in the price level.
According to the new growth theory, which of the following promote economic growth?
i. discoveries that bring profit ii. choices that expand human capital iii. random events that create technology change A) i and ii B) i only C) i, ii and iii D) i and iii E) ii only