When the government cuts the income tax rate,the supply of labour ________,the demand for labour ________,and the equilibrium level of employment ________.

Question

Quizplus · Accepted Answer

When the government cuts the income tax rate, individuals have more incentive to work, increasing the supply of labor. The demand for labor is not directly affected by tax cuts, so it does not change. With more people willing to work, the equilibrium level of employment increases.

When the Government Cuts the Income Tax Rate,the Supply of Labour