If a tax cut increases people's labor supply,then
A) tax cuts increase potential GDP.
B) tax cuts decrease aggregate demand.
C) tax cuts decrease potential GDP because the real wage rate falls.
D) tax cuts cannot affect aggregate demand.
E) Both answers B and C are correct.
Correct Answer:
Verified
Q74: Which of the following is a limitation
Q75: Government expenditure _ change potential GDP and
Q76: In an expansion,federal tax receipts increase proportionally
Q77: An increase in government expenditure can _
Q78: An income tax hike
A)increases potential GDP.
B)increases employment.
C)decreases
Q80: Automatic stabilizers are defined as
A)actions taken by
Q81: Taxes that change with the level of
Q82: Automatic stabilizers decrease the impact of a
Q83: Needs-tested spending
A)increases as real GDP increases.
B)increases as
Q84: Automatic stabilizers include
A)changes in induced taxes and
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