In both the supply-side view and the demand-side view of fiscal stimulus, tax cuts are _____, but the two views differ regarding:
A) expansionary; the impact on the money supply.
B) contractionary; the impact on the money supply.
C) expansionary; why.
D) contractionary; why.

Question

Quizplus · Accepted Answer

In both supply-side and demand-side economics, tax cuts are considered expansionary because they are believed to increase economic activity by either increasing demand (demand-side view) or by encouraging investment and production (supply-side view). The difference lies in the reasoning or mechanism through which tax cuts are believed to stimulate the economy.

In Both the Supply-Side View and the Demand-Side View of Fiscal