The experience of the U.S. with supply-side policies is that tax cuts affect the economy more on the demand side rather than the supply side.

Question

Quizplus · Accepted Answer

While supply-side policies aim to increase production and supply by incentivizing investment and entrepreneurial activity, the evidence suggests that tax cuts typically stimulate spending and consumption in the short-term, which has a greater impact on demand than supply. This is based on empirical data from the implementation of supply-side policies in the U.S., such as the Reagan administration's tax cuts in the 1980s and the George W. Bush administration's tax cuts in the early 2000s.

The Experience of the U