One central idea in supply-side economics concerning budget deﬁcits is illustrated by the
A) production possibilities curve.
B) aggregate supply curve.
C) Laffer Curve.
D) Phillips Curve.

Question

Quizplus · Accepted Answer

The Laffer Curve, a central idea in supply-side economics, illustrates the relationship between tax rates and government revenue. According to supply-side theory, lowering tax rates can stimulate economic growth and actually increase government revenue in the long run, as individuals and businesses are incentivized to work and invest more. This theory suggests that cutting taxes can help reduce budget deficits. Therefore, the correct answer choice is C) Laffer Curve.

One Central Idea in Supply-Side Economics Concerning Budget Deﬁcits Is