The Supply-Side Effects of a Reduction in Taxes Are the Result

Multiple Choice

The supply-side effects of a reduction in taxes are the result of

A) increases in the disposable income of households accompanying reductions in tax rates.
B) the stimulus effects of increases in government expenditures.
C) increased attractiveness of productive activity relative to leisure and tax avoidance.
D) reductions in interest rates that generally accompany expansionary fiscal policy.