According to advocates of supply-side economics, what will happen if the government cuts taxes on large businesses and wealthy individuals?

Question

A) Government deficits will increase.
B) More money will be invested in economic innovation and growth.
C) Social conflict will increase.
D) The economy will shrink.

Answer 1

B) More money will be invested in economic innovation and growth.

Advocates of supply-side economics argue that cutting taxes on large businesses and wealthy individuals leaves them with more capital to invest, which in turn is expected to stimulate economic growth and innovation.