Supply-side economists say that:

Question

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Supply-side economists argue that lower tax rates on businesses will incentivize them to increase production and investment, shifting the aggregate supply curve rightward. This is based on the idea that supply creates its own demand, as increased production leads to increased income and demand for goods and services. Therefore, choice A is the best answer. Choices B, C, and D are incorrect, as demand does not necessarily create its own supply, tariffs on imports can decrease aggregate supply by increasing production costs, and eliminating the federal budget deficit can be accomplished through a variety of means beyond just tax increases.

Supply-Side Economists Say That