Supply-side economists argue that changes in tax rates cause changes in

Question

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Supply-side economists believe that changes in tax rates incentivize people to work harder or work less depending on whether the tax rates increased or decreased. This change in labor supply affects the full-employment level of output, as well as tax revenues. Therefore, all three options (A, B, and C) are affected by changes in tax rates according to supply-side economists.

Supply-Side Economists Argue That Changes in Tax Rates Cause Changes