Which of the following would be considered a supply-side policy?
A) an increase in the minimum wage that would cause consumer spending to increase
B) an increase in government spending that would lead to increased aggregate demand
C) investment tax credits for businesses to encourage investment
D) a decrease in the growth of the money supply

Question

Quizplus · Accepted Answer

Investment tax credits for businesses to encourage investment is a supply-side policy. It incentivizes businesses to invest more in their operations, which could lead to increased productivity and output in the long run. Options A and B are demand-side policies because they focus on increasing consumer spending and aggregate demand respectively. Option D is a monetary policy decision, which can have both demand-side and supply-side effects but is not specifically a supply-side policy.

Which of the Following Would Be Considered a Supply-Side Policy