The supply-side economists expect that a cut in the marginal income tax rate,with lost revenues made up by a cut in government spending,would

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Supply-side economists argue that a cut in marginal income tax rates, which reduces the tax burden on individuals and businesses, would increase incentives to work, save and invest. This would lead to an increase in aggregate supply and potential output. By cutting government spending, which would reduce the level of crowding out and allow interest rates to fall, this would increase investment and private sector demand. Therefore, the combination of tax cuts and spending cuts is expected to boost output over time.

The Supply-Side Economists Expect That a Cut in the Marginal