Supply-side economist Arthur Laffer has argued that
A)there is no empirically proven relationship between tax rates and incentives.
B)large reductions in personal and corporate income taxes will increase aggregate supply much more than aggregate demand.
C)the only way to eliminate inflation is to increase taxes to induce a recession severe enough to eliminate inflationary expectations.
D)large cuts in income taxes will increase aggregate demand more than aggregate supply.

Question

Quizplus · Accepted Answer

Arthur Laffer is known for the Laffer Curve, which suggests that lower tax rates can lead to increased economic activity and thus increase aggregate supply more than aggregate demand.

Supply-Side Economist Arthur Laffer Has Argued That