Supply-Side Policies Mcqs for Preparation

According to the Laffer curve, as tax rates increase tax revenue ?

A. initially increase and then decrease
B. decrease continuously.
C. rise continuously
D. initially decrease and then increase.

According to Supply-side economists. if taxes are cut so that people have an increased incentive to work and businesses have an increased incentive to invest ?

A. aggregate supply will increase will increase aggregate demand will decrease and the price level will decrease
B. aggregate supply will increase will increase aggregate output will increase and the price level will decrease
C. aggregate supply will increase will increase aggregate output will increase and the price level will increase
D. both aggregate supply and demand will increase will increase and the price level will increase

A group of economists argue that the real problem with the economy is high rates of taxation and heavy regulation that reduce the incentives to work, save and invest. These economists are?

A. Supply-side economics
B. neo-Keynesian economists
C. rational-expectations economists.
D. new classical economists.