Most economists think that
A) supply-side effects of a tax cut exceed the demand-side effects.
B) demand-side effects of a tax cut exceed the supply-side effects.
C) demand-side and supply-side effects of a tax cut offset each other.
D) there are only supply-side effects from a tax cut.

Question

Quizplus · Accepted Answer

Most economists believe that the demand-side effects of a tax cut exceed the supply-side effects because a tax cut increases consumers' disposable income, leading to an increase in consumer spending which stimulates demand more immediately and significantly than it affects supply.

Most Economists Think That