Asked by giannah alessandra on May 10, 2024
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The supply-side effect of higher tax rates would include a fall in the economy's potential GDP.
Supply-Side Effect
Economic effects that result from changes in production capacity and costs, influencing the aggregate supply in the economy.
Tax Rates
The percentage at which an individual or corporation is taxed, applied to income or transactions.
Potential GDP
The highest level of economic output that an economy can sustain over the long term without increasing inflation.
- Comprehend the effects that fiscal policy measures, including changes in taxes and adjustments in public spending, have on the price levels within an economy and its probable output.
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Learning Objectives
- Comprehend the effects that fiscal policy measures, including changes in taxes and adjustments in public spending, have on the price levels within an economy and its probable output.
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