Which theory of economic management focuses on encouraging product through tax reduction ?
Correct answer: C. Supply-side economics
- A. Liberalism
- B. Free market economics
- C. Supply-side economics
- D. Supervised market
Explanation
Supply-side economics seeks to expand production by improving incentives to work, invest and produce, including through tax reductions. Its focus is increasing aggregate supply rather than merely stimulating demand.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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