Most economists believe that a cut in tax rates
A)would generally increase government tax revenue.
B)would have no effect on aggregate demand.
C)has a relatively small effect on the aggregate-supply curve.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

Most economists believe that a cut in tax rates would have a relatively small effect on the aggregate-supply curve. While it may stimulate economic growth and increase output in the long run, the effects may be small and take time to materialize. It is not likely to have a significant impact on government tax revenue or aggregate demand in the short run.

Most Economists Believe That a Cut in Tax Rates