Section: Principles of Macroeconomics

23) Supply-side economists argue that

1. lower tax rates provide positive work incentives and thus shift the aggregate supply curve to the right.
2. increase government spending should be used to stimulate the economy.
3. the government should regulate the supply of imports.
4. a cut in high tax rates results in an increased deficit and thus increases aggregate supply.
5. the aggregate supply of goods can only be increased if the price level falls.