When the government lowers the income tax rate, ______ A. Employment increases and potential GDP increases B.

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When the government lowers the income tax rate, ______

A. Employment increases and potential GDP increases

B. Employment does not change but labor productivity falls

C. Labor productivity rises and employment decreases

D. Both labor productivity and potential GDP increase

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Foundations of Macroeconomics

ISBN: 978-0134492001

8th edition

Authors: Robin Bade, Michael Parkin

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Question Posted: May 21, 2018 08:53 AM

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When the government lowers the income tax rate, ______ A. Employment increases and potential GDP increases B.

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Foundations of Macroeconomics

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