If the government wishes to promote a higher rate of growth of real GDP, a supply-side economist would argue the appropriate policy is
A) engaging in expansionary fiscal policy by lowering marginal tax rates.
B) engaging in expansionary fiscal policy of increasing government spending.
C) lowering marginal tax rates on people and raising them on corporations.
D) leaving the economy alone and letting the natural forces bring it into a long-run equilibrium.
Correct Answer:
Verified
Q120: Suppose that real GDP is initially $20
Q121: Supply-side economics focuses on how fiscal policy
Q122: The Laffer curve
A) initially slopes upward as
Q123: A government proposal to increase marginal tax
Q124: According to supply-side economics, lower tax rates
Q126: Which of the following best explains why
Q127: The permanent income hypothesis implies that the
Q128: According to the permanent income hypothesis, taxpayers
Q129: If an increase in government spending causes
Q130: Because of crowding out
A) expansionary fiscal policy
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