Multiple Choice
According to supply-side theories, which of the following happens if the government cuts the tax rate?
A) Workers keep less of each additional dollar they earn, so work effort increases, and aggregate supply shifts right.
B) Workers keep less of each additional dollar they earn, so work effort decreases, and aggregate supply shifts left.
C) Workers keep more of each additional dollar they earn, so work effort increases, and aggregate supply shifts right.
D) Workers keep more of each additional dollar they earn, so work effort decreases, and aggregate supply shifts left.
Correct Answer:
Verified
Correct Answer:
Verified
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