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

Correct Answer: aggregate supply will increase , aggregate demand will decrease ✔

Last Updated: June 18, 2019