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

question 68

Multiple Choice

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

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

---

Definitions:

Motivates

The act of providing motivation or encouragement to someone to inspire action or elicit a desired behavior.

Values

Worth or importance you attach to various factors in your life.

Embellish

To add decorative details or features to something, often in a way that makes it more attractive or interesting.

Resume

A document created and used by a person to present their background, skills, and accomplishments, often for securing employment.