Question

A tax cut has effects on aggregate supply. A tax cut increases the supply of labor and the supply of loanable funds, both of which increase aggregate supply.
The supply side effect make the tax multiplier larger than government expenditure multiplier.

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Answer 1

Yes supply side effects increase supply of good snd service as results economy growth Increase and this increase in supply side also provide jobs as economy grows and thus tax collection also increase. This increase supply of labor ,capital etc again increase economic growth and income of house hold and thus again investment increase and thus taxation collection also increase. Thus this become a multplier phenomenon as tax amount increase will give government to spend more money on capital and welfare of people , which again increase status bof people and thus taxes collection increase. Thus government expenditure multiplier will be is less than tax multiplier as more people pay taxes and government have to spend less compare to before .