Critics of supply-side economics agree that shortly after the Reagan tax cuts were put into place, the economy began to expand. These critics, though, argue that the expansion did not result from the supply-side policies, but rather from
A) the fact that the Federal Reserve dramatically increased the money supply at the same time that the tax cuts became effective.
B) the self-correcting nature of the economy.
C) the increases in government spending that occurred at the same time the tax cuts became effective.
D) a very large increase in the demand for U.S. exports at the same time that U.S. imports fell dramatically.

Question

Quizplus · Accepted Answer

Critics of supply-side economics argue that the expansion of the economy after the Reagan tax cuts was due to the Federal Reserve increasing the money supply, which fueled economic growth. This is known as the monetary policy approach to economic expansion, which is a separate economic theory from supply-side economics.

Critics of Supply-Side Economics Agree That Shortly After the Reagan