Solved

According to the Theory of Supply-Side Economics,a Cut in the Tax

Question 11

Multiple Choice

According to the theory of supply-side economics,a cut in the tax rate will actually result in an increase rather than a decrease in tax revenues.Which statement best explains how this is supposed to happen?


A) Lower tax rates encourage greater investment,leading to economic growth that contributes to a higher tax base.
B) High tax rates stimulate government spending,which overheats the economy and brings on an economic downturn.
C) High tax rates give the government too much ability to pass and enforce regulations that are burdensome on the private sector.
D) Lower tax rates reduce bureaucratic intervention in the economy,allowing both consumers and producers to keep more of their own money.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents