An Increase in Income Taxes

An increase in income taxes

A) decreases potential GDP because real GDP decreases when households have less disposable income to spend.
B) increases potential GDP because workers have to work longer hours to maintain the same standard of living before the tax increase.
C) does not affect potential GDP as long as the economy's endowments of resources and the state of technology remain unchanged.
D) decreases potential GDP because workers' incentives to work are weakened.
E) does not affect potential GDP because potential GDP depends on technology only.