One part of the supply-side argument is that
A) lower marginal tax rates are required to induce Congress to reduce government spending.
B) lower marginal tax rates can increase total tax revenues.
C) the marginal tax rate should be set at 50 percent.
D) the relevant aggregate supply curve is close to horizontal.

Question

Quizplus · Accepted Answer

The supply-side argument suggests that lower marginal tax rates can stimulate economic growth and lead to an increase in total tax revenues. This is based on the idea that lower taxes can provide greater incentives for individuals and businesses to work, save, and invest, which in turn can lead to more output, employment, and income. However, this argument is controversial and has been subject to debate among economists and policymakers.

One Part of the Supply-Side Argument Is That