Lower income taxes cause a ____________shift of the labor supply curve,which then produces__________ Real GDP.
A) rightward; less
B) rightward; more
C) leftward; less
D) leftward; more

Question

Quizplus · Accepted Answer

Lower income taxes would increase the after-tax wage rate and incentivize individuals to work more hours, leading to a rightward shift of the labor supply curve. This would result in an increase in the quantity of labor supplied, which would ultimately lead to an increase in Real GDP.

Lower Income Taxes Cause a ____________Shift of the Labor Supply