A criticism of the arguments for tax cuts made by supply-side economists is that the:
A)demand-side effects will be stronger than the supply-side effects.
B)supply-side effects will be stronger than the demand-side effects.
C)supply-side effects will increase saving and reduce consumption.
D)demand-side effects will reinforce the supply-side effects, thus creating cost-push inflation.

Question

Quizplus · Accepted Answer

Supply-side economists argue that tax cuts will lead to increased production and economic growth. However, critics argue that the demand-side effects, such as increased consumption from higher disposable income, may be stronger and more immediate than the long-term supply-side effects, potentially leading to inflation or budget deficits.

A Criticism of the Arguments for Tax Cuts Made by Supply-Side