Supply-side economics stresses that a tax cut and an investment tax credit would shift:

Question

Supply-side economics stresses that a tax cut and an investment tax credit would shift:​

Quizplus · Accepted Answer

Supply-side economics emphasizes that tax cuts and investment tax credits will increase the supply of goods and services, thereby shifting the aggregate supply curve to the right. This increase in supply will lower input costs, allowing firms to produce more output at a lower price level, which will overall stimulate aggregate demand as customers have more disposable income. Therefore, both the aggregate demand and the aggregate supply curves shift, emphasizing an increase in the economy's potential output.

Supply-Side Economics Stresses That a Tax Cut and an Investment