Which of the following is a tenet of supply-side economics?
A) High marginal tax rates severely discourage work, saving, and investment.
B) Increases in Social Security taxes and other business taxes shift the aggregate supply curve to the right.
C) The Federal Reserve should adhere to a monetary rule that limits increases in the money supply to a 5 percent annual rate.
D) Transfer payments increase incentives to work.

Question

Quizplus · Accepted Answer

High marginal tax rates discourage work, saving, and investment, which are key elements of supply-side economics. Supply-side economics emphasizes the importance of reducing taxes and government regulations to increase incentives for individuals and businesses to produce more goods and services, leading to economic growth.

Which of the Following Is a Tenet of Supply-Side Economics