If a tax cut increases peopleʹs labor supply, then

Name: If a tax cut increases peopleʹs labor supply, then
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Quizplus · Accepted Answer

When a tax cut increases people's labor supply, it means they are more willing to work, which leads to an increase in potential GDP. This is because potential GDP is the maximum level of output an economy can produce when all its resources are fully employed, and a tax cut increases the supply of labor, which is a key resource in the economy. Therefore, tax cuts can increase potential GDP.

If a Tax Cut Increases Peopleʹs Labor Supply, Then