Question

Supply-side economics is based on the theory that if taxes are reduced, _____.

Answer 1

People will have more incentive to work and more money to spend

Answer 2

the economy will start to grow at higher rates, i.e. more tax cuts = more economic growth

Step-by-step explanation:

Supply-side economists believe that low marginal tax rates favor higher income, higher output, and greater efficiency of resource use. Supply side economics is a type of neoclassical economics which was primarily used by President Ronald Reagan.