From the perspective of supply-side economists, a cut in tax rates will
A)increase output but will increase the budget deficit.
B)increase unemployment but will reduce the budget deficit.
C)reduce unemployment but will increase the budget deficit.
D)reduce unemployment and also reduce the budget deficit.

Question

Quizplus · Accepted Answer

Supply-side economists believe that cutting tax rates can stimulate economic growth by increasing output and reducing unemployment, which can lead to higher tax revenues and potentially reduce the budget deficit.

From the Perspective of Supply-Side Economists, a Cut in Tax