Discussion
Principles of Supply-side Economics focus on .................... .
Answer: A
Supply-side economics focuses on shifting AS curve to the right.
Supply-side economics holds that growth is best achieved by raising the economy's productive capacity: lower marginal tax rates, deregulation and incentives to work, save and invest increase aggregate supply. A rightward shift of AS raises output while easing price pressure.
Shifting AD is the Keynesian demand-management route. Shifting AS to the left would mean lower capacity and higher prices, the opposite of the aim.
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