In the diagram, the economy first rests in equilibrium at point X. The government then implements a supply-side policy measure, causing the economy to shift to point Z. Which supply-side policy and response could account for this movement?
- Aa cut in income tax to increase the incentive to work but which results in workers increasing their leisure time
- Ba cut in unemployment benefit which results in more applications for training courses
- Ca rise in government spending on education which increases labour productivity
- Dprivatisation of key industries which results in an increase in economic efficiency