Suppose a family with an earned income of $2,000 receives an extra $2,000 under a negative income tax scheme.If this family's earned income increased by $100,the tax payment it receives would

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Under a negative income tax scheme, as a family's earned income increases, the tax payment (or subsidy) it receives decreases, but not on a dollar-for-dollar basis. This means that if the family's income increases by $100, the reduction in their tax payment would be less than $100, reflecting the scheme's intent to gradually reduce benefits as income rises without creating a disincentive to earn more.

Suppose a Family with an Earned Income of $2,000 Receives