Most economists believe that a cut in tax rates will do which of the following?

Question

Quizplus · Accepted Answer

Most economists believe that a cut in tax rates will have a relatively small effect on the aggregate supply curve. This is because while lower tax rates may incentivize individuals and businesses to work harder and invest more, it may also lead to higher budget deficits and government borrowing, which can lead to inflation and higher interest rates. Additionally, the impact on the aggregate supply curve may be offset by other economic factors such as changes in consumer spending and foreign trade.

Most Economists Believe That a Cut in Tax Rates Will