During the Early Years of the Reagan Administration, Some of the Presidential

Multiple Choice

During the early years of the Reagan administration, some of the presidential advisors argued that tax cuts could reduce inflation because they would give people an incentive to produce more. Critics of this argument believed that tax cuts would increase inflation, not reduce it. The critics were arguing that tax cuts move the:

A) aggregate demand curve to the right with little change in long-run aggregate supply.
B) aggregate demand curve to the left with little change in long-run aggregate supply.
C) long-run aggregate supply curve to the right with little change in aggregate demand.
D) long-run aggregate supply curve to the left with little change in aggregate demand.