The supply side effects of a cut in tax rates include _________in the supply of labor and_________ in the supply of loanable funds.
A) an increase; an increase
B) a decrease; an increase
C) an increase; a decrease
D) a decrease; a decrease

Question

Quizplus · Accepted Answer

A cut in tax rates can incentivize individuals to work more, increasing the supply of labor, and can also lead to more savings, increasing the supply of loanable funds.

The Supply Side Effects of a Cut in Tax Rates