If we compare the United States to France, we see that potential GDP per person in France is ________ than that in the United States because the French tax wedge is ________ than the U.S. tax wedge.

Question

Quizplus · Accepted Answer

Potential GDP per person in France is less than that in the United States because the French tax wedge is larger than the U.S. tax wedge. A larger tax wedge reduces the incentive for work, investment, and production, leading to a lower potential GDP per person.

If We Compare the United States to France, We See