Asked by Heidi Canaveral on May 19, 2024
Verified
A supply-side economist would recommend a cut in marginal tax rates on capital gains and on investment expenditures
A) When the economy is in a recession.
B) If government spending is cut by an equal amount.
C) If it is judged that the resulting deficit will not crowd out very much investment.
D) Regardless of the state of the economy or other policies.
Marginal Tax Rates
The rate at which the last dollar of a taxpayer's income is taxed, indicating the rate applied to each additional dollar of income.
Capital Gains
The profit realized from the sale of assets, such as stocks or real estate, that have increased in value over their purchase price.
Investment Expenditures
Investment expenditures refer to the spending on capital goods by firms that are intended to improve future production or purchases made by individuals in financial instruments or capital assets.
- Understand the principles of supply-side economics and its stance on tax policies.
Verified Answer
Learning Objectives
- Understand the principles of supply-side economics and its stance on tax policies.
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