-Which economists believe a decrease in marginal tax rates will ultimately cause the economy to move from point B to point D in Figure 18.3?

Question

Quizplus · Accepted Answer

Supply-siders believe that a decrease in marginal tax rates will lead to increased incentives for individuals to work and invest, ultimately leading to economic growth and movement from point B to point D on the production possibility frontier. Monetarists focus on the relationship between money supply and economic growth, and Keynesians emphasize the role of government spending and demand-side policies to stimulate economic growth, so neither of these perspectives would necessarily advocate for a decrease in marginal tax rates as the primary solution for economic growth.

-Which Economists Believe a Decrease in Marginal Tax Rates Will