Supply-Side Theory

AAA

DEFINITION of 'Supply-Side Theory'

An economic theory holding that bolstering an economy's ability to supply more goods is the most effective way to stimulate economic growth.

INVESTOPEDIA EXPLAINS 'Supply-Side Theory'

Supply-side theorists advocate income tax reduction because it increases private investment in corporations, facilities, and equipment.

RELATED TERMS
  1. Trickle-Down Theory

    An economic idea which states that decreasing marginal and capital ...
  2. Milton Friedman

    An American economist and statistician best known for his strong ...
  3. Quantity Supplied

    A term used in economics to describe the amount of goods or services ...
  4. Recession

    A significant decline in activity across the economy, lasting ...
  5. Demand

    An economic principle that describes a consumer's desire and ...
  6. Supply Chain

    The network created amongst different companies producing, handling ...
Related Articles
  1. Economics Basics
    Economics

    Economics Basics

  2. How Your Tax Rate Is Determined
    Taxes

    How Your Tax Rate Is Determined

  3. India Is Eclipsing China's Economy As ...
    Economics

    India Is Eclipsing China's Economy As ...

  4. Ebola's Economic Impacts on Liberia, ...
    Economics

    Ebola's Economic Impacts on Liberia, ...

comments powered by Disqus
Hot Definitions
  1. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  2. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  3. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  4. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  5. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  6. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
Trading Center