Question

What is meant by​ supply-side economics?

A. ​Supply-side economics refers to the use of taxes to increase incentives to​ work, save,​ invest, and start a business in order to decrease​ long-run aggregate supply.
B. ​Supply-side economics refers to the use of taxes to increase incentives to​ work, save,​ invest, and start a business in order to increase​ long-run aggregate supply.
C. ​Supply-side economics refers to the use of taxes to increase incentives to​ work, save,​ invest, and start a business in order to increase​ short-run aggregate supply.
D. ​Supply-side economics refers to the use of taxes to decrease incentives to​ work, save,​ invest, and start a business in order to increase​ long-run aggregate supply.

Answer 1

The correct answer is option B.

Step-by-step explanation:

Supply-side economics refers to the use of taxes to stimulate the economy. It involves reducing taxes to promote the incentive of working, saving and investing. This leads to an increase in the long-run aggregate supply.

The supply-side fiscal policy provides incentives to businesses to expand their operations.

Supply-side economics advocates that production leads to economic growth.