If a tax cut increases peopleʹs labor supply, then
A. tax cuts increase potential GDP.
B. tax cuts decrease aggregate demand.
C. tax cuts cannot affect aggregate demand.
D. Both answers A and B are correct.
Answer:A
If a tax cut increases peopleʹs labor supply, then
A. tax cuts increase potential GDP. B. tax cuts decrease aggregate demand. C. tax cuts cannot affect aggregate demand. D. Both answers A and B are correct.