17. What assumption is made with supply-side economics? A. Increased federal spending will slow inflation, bringing prices down. B. Tax cuts will slow inflation, keeping prices down. C. Increased federal spending will stimulate the economy, bringing in more tax revenue. D. Tax cuts will stimulate the economy, eventually bringing in more tax revenue.

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Simon Hinton

31 May, 08:44

17. What assumption is made with supply-side economics? A. Increased federal spending will slow inflation, bringing prices down. B. Tax cuts will slow inflation, keeping prices down. C. Increased federal spending will stimulate the economy, bringing in more tax revenue. D. Tax cuts will stimulate the economy, eventually bringing in more tax revenue.

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Nola Moreno · Answer 1

Assumption is made with supply-side economics that tax cuts will slowinflation, keeping prices down

Luciano May · Answer 2

The answer to the question is letter D. Tax cuts will stimulate the economy, eventually bringing in more tax revenue.

The increased government revenue from a faster-growing economy would be enough to compensate completely for the short-term costs of a tax cut, and that tax cuts could cause overall revenue to increase (that's a fact).

Some advocates of the supply-side economics claim that tax cuts ultimately led to an overall increase in governmental revenue due to stronger economic growth.