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.
A
Economics
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Globalization has ________ the price of many goods, which has caused the value marginal product of unskilled labor to ________ and the demand for unskilled labor to ________
A) decreased; decrease; decrease B) decreased; decrease; increase C) decreased; increase; increase D) increased; increase; increase
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As you move down the production possibility frontier, the absolute value of the marginal rate of transformation
A. increases. B. initially decreases, then increases. C. decreases. D. initially increases, then decreases.
Economics