Question

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.

Answer 1

Answer:

C. Has a relatively small effect on the aggregate-supply curve.

Explanation:

Cut in tax rates has it various views by a lot of economist, government officials and also the masses in general. In the view of a reasonable amount of economists, cut in rate of taxes are seen to have a relatively small effect on the aggregate supply curve.

While this aggregate supply curve is known to be the total supply of goods and also services produced by an economy in an overall period. This term can also be referred to as total output in some cases. This curve is seen to have effects on variables which ranges from the size and quality of labor to technological innovations, an increase in wages and a whole other variables too.