Question

Explain how tax cuts affect the economy from a Supply-Side economist’s perspective.

Answer 1

Supply side economics is a macroeconomics theory which states to decreasing the regulation and curtailing the higher taxes so that economic growth is generated .As per this theory if their will be lower regulation of law then producer will supply more goods.and lower tax will also boost to get the benefit of economic growth.This is just opposite of demamd side economics.

If their will be low tax then consumer will get more benefits hence his savings will also increases due to this.

This will generate higher employment.hence higher supply will generate more supply of money or circulation of money.it also gives boost to overall economy.