Answer:
c. both demand‑side and supply‑side
a. supply‑side
Step-by-step explanation:
A reduction in tax rates is both a demand‑side and supply‑side policy. Lower tax rates give consumers more money to spend and therefore positively impacts aggregate demand. In addition, the lower tax rates will increase take‑home pay, which can increase worker effort and create more supply in the long run. Also, lower tax rates on businesses can increase the probability that an entrepreneur will take a risk or purchase an additional investment good. The tax reduction effects both demand and supply side of the economy so it is included in both.
It takes longer for supply‑side policies to have an impact on the economy than demand‑side policies. In theory, supply‑side policies are beneficial for the economy because they do not create inflationary pressure. However, they do take longer to have an impact than do their inflationary demand‑side policy counterparts. The supply-side changes of fiscal policy are lagged and demand-side changes are direct so the supply-side policy takes time to effect.