Which of the following would expand aggregate demand according to Keynesians,while stimulating aggregate supply according to modern supply-siders?

Question

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According to Keynesians, increasing government purchases (Option A) and increasing transfer payments (Option B) would stimulate aggregate demand, but not necessarily stimulate aggregate supply. Open-market purchases of Treasury bonds by the Fed (Option C) and cutting the discount rate and reserve requirements on demand deposits (Option D) would also increase aggregate demand but may have negative effects on the supply side such as inflation.

On the other hand, cutting personal and corporate marginal tax rates (Option E) is seen as a policy that would stimulate aggregate demand (by leaving more money in the hands of consumers and businesses) while also stimulating aggregate supply (by encouraging work, investment, and entrepreneurship). This policy is often associated with modern supply-side economics.

Which of the Following Would Expand Aggregate Demand According to Keynesians,while