Macroeconomics 12th Edition by Michael Parkin

تمرين 3

The government is considering raising the tax rate on labor income and asks you to report on the supply-side effects of such an action. Answer the following questions using appropriate graphs. You are being asked about directions of change, not exact magnitudes. What will happen to:
a. The supply of labor and why
b. The demand for labor and why
c. The equilibrium level of employment and why
d. The equilibrium before-tax wage rate and why
e. The equilibrium after-tax wage rate and why
f. Potential GDP