Consider a Tax Cut Which Affects Not Only Consumer Disposable

Multiple Choice

Consider a tax cut which affects not only consumer disposable income,but also after-tax earnings from labor supplied to labor markets and from financial assets acquired through saving.In the long run we would expect this tax cut to

A) decrease both the price level and increase real GDP.
B) increase both the price level and the level of real GDP.
C) increase the level of real GDP.
D) increase the price level.