The difference between what a productive resource receives as payment for its use in production and the cost of bringing that resource into production is defined as

If a tax cut increases people's labor supply, then the tax cut

A) increases potential GDP. B) decreases aggregate demand. C) decreases potential GDP because the real wage rate falls. D) does not affect aggregate demand. E) Both answers B and C are correct.

In the classical model, government purchases or tax cuts are appropriate policies to raise GDP

a. True b. False