Looking at the Supply-Side Effects on Aggregate Supply Shows That

question 194

Multiple Choice

Looking at the supply-side effects on aggregate supply shows that a tax hike on labor income

• A) decreases potential GDP.
• B) weakens the incentive to work.
• C) increases potential GDP because people work more to pay the higher taxes.
• D) Both answers A and B are correct.

---

Definitions:

Perishable

Refers to goods that have a limited lifespan or durability and therefore need to be consumed or used within a certain period before they deteriorate.

Common Standard

A uniform criterion or benchmark that can be widely used across different systems, organizations, or industries to ensure compatibility and efficiency.

Management Duties

Encompasses a range of responsibilities held by managers, including planning, organizing, leading, and controlling resources to achieve organizational objectives.

Corrective Action

Measures taken to rectify a problem, error, or deviation from a desired standard or performance.