What is the definition of supply-side fiscal policy? Click or tap a choice to answer the question. fiscal policy that minimizes cyclical upturns and downturns in the economyfiscal policy that emphasizes tax cuts rather than government spendingfiscal policy aimed at impacting long-run aggregate supply rather than aggregate demandfiscal policy that taxes higher-income workers at a higher percentage rate than lower-income ones

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Business

Journey Blanchard

13 June, 00:57

What is the definition of supply-side fiscal policy? Click or tap a choice to answer the question. fiscal policy that minimizes cyclical upturns and downturns in the economyfiscal policy that emphasizes tax cuts rather than government spendingfiscal policy aimed at impacting long-run aggregate supply rather than aggregate demandfiscal policy that taxes higher-income workers at a higher percentage rate than lower-income ones

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Karla Cortez · Answer 1

A supply-side fiscal policy is defined as the policy that emphasizes tax cuts rather than government spending.

Explanation:

A supply-side fiscal policy attempts to influence the economy from the side of the supply (as opposed to the demand) according to the theory that, by cutting the taxes that the businesses are paying, then they will have more capacity to hire new people and thus activate the economy by reducing the unemployment rate and then by increasing the demand, in consequence.

A demand-side fiscal policy would imply tax reductions or an increase in the government's spending so that it can boost the economy from the side of the "consumers" [the demand] rather than from the side of the "businesses" [the supply].