Supply-side policy often has fiscal consequences.
Which statement is not correct?
1 )
Increased government spending supporting technical progress has beneficial long-term supply-side effects but may have short-term inflationary consequences.
2 )
Increased government expenditure on training increases a country’s long-run aggregate supply (LRAS) and also has an expansionary effect on aggregate demand (AD).
Reduced government infrastructure spending reduces an economy’s LRAS and has a short-term expansionary effect on AD.
4 )
Reduced rates of tax on higher incomes increases an economy’s LRAS and has an expansionary effect on AD.
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