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Suppose the Current Welfare System Is Completely Eliminated and Replaced

Question 81

Multiple Choice

Suppose the current welfare system is completely eliminated and replaced with a negative income tax.The tax credit granted to everyone is $10,000 and the tax on earnings is 25%.
-Refer to the above information.The breakeven level of income under the negative income tax is


A) $10,000.
B) $13,333.
C) $25,000.
D) $40,000.
E) $50,000.

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