Solved

A Tax Cut on Capital Income

Question 38

Multiple Choice

A tax cut on capital income


A) does not affect potential GDP because the interest rate affects aggregate expenditure only.
B) increases potential GDP because the supply of loanable funds increases.
C) does not affect potential GDP because it has no impact on the supply of labour.
D) increases potential GDP because households have more disposable income to spend.
E) increases potential GDP because workers have greater incentives to work.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents