Question

What assumption is made with supply-side economics? A. Increased federal spending will slow inflation, bringing prices down. B. Tax cuts will stimulate the economy, eventually bringing in more tax revenue. C. Tax cuts will slow inflation, keeping prices down. D. Increased federal spending will stimulate the economy, bringing in more tax revenue.

Answer 1

Correct answer choice is:

B. Tax cuts will stimulate the economy, eventually bringing in more tax revenue.

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Explanation:

Supply-side economics implies that flatter tax rates increase financial growth by supplying people motivations to serve, save, and spend more. A crucial assumption of this approach is that furnishing tax forms for high-income people generates higher economic interests than granting tax decreases to lower-income populations.

Answer 2

One  assumption that is made with supply-side economics would be that "B. Tax cuts will stimulate the economy, eventually bringing in more tax revenue," since this theory holds that wealth "trickles down" from the top of the economy.