Which one of the following statements is correct under the theory of supply-side economics?
A. High marginal tax rates severely discourage work, saving, and investment.
B. Transfer payments increase incentives to work.
C. Increases in social security taxes and other business taxes shift the aggregate supply curve to the right.
D. The Federal Reserve should adhere to a monetary rule that limits increases in the money supply to a 5 percent annual rate.

My answer is A

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    Ms. Sue

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