Question

Which of the following emphasizes incentives and tax cuts as a means of increasing economic growth?

• A. Efficiency wage theory
• B. Real-business cycle theory
• C. The rational-expectations hypothesis
• D. Supply-side economics

Answer 1

The correct option is D Supply-side economics

Supply-side economics is a macroeconomic theory that argues economic growth can be most effectively created by investing in capital and by lowering barriers on the production of goods and services. It also emphasizes that incentives and tax cuts will achieve economic growth.