The government reduced income tax for workers. Unemployment benefits remained unchanged. Table 1 shows average weekly incomes before and after the change.
| Period | Weekly unemployment benefit | Average weekly take-home pay from paid work |
|---|---|---|
| Before the change | £150 | £400 |
| After the change | £150 | £420 |
Using the information in Table 1, explain how this change may affect the economy's productive capacity.
121 exam-style questions on OCR GCSE Economics 3.7 Supply side policies, covering 3.7.1 What are supply side policies and 3.7.2 Costs and benefits of supply side policies. Each one has a worked solution and a mark scheme showing where the marks go.