Which of the following statements is a fundamental part of supply-side economics?

The economy will only reach equilibrium and prosperity through the self-regulation of the free market.

The government should reduce taxes to promote economic growth by increasing aggregate supply.

The federal government should have a balanced budget every year to protect economic growth.

The government can use deficit spending to increase aggregate demand and pull the economy out of recession.

The statement that is a fundamental part of supply-side economics is option B. The government should reduce taxes to promote economic growth by increasing aggregate supply.

What is supply-side economic?

Supply-side economics is a macroeconomic theory that projects economic growth can be most effectively fostered by lowering taxes, decreasing regulation, and allowing free trade.

Therefore, the correct answer is as given above.

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