In 2008, Britain decided to cut its value added tax (VAT) to 15 percent from 17.5 percent. The VAT is similar to a sales tax. According to the supply- side view, this change will increase
i. the after- tax wage
ii. the incentive to work
iii. the supply of labor
A) ii only.
B) ii and iii only.
C) i, ii and iii.
D) i and ii only.
Correct Answer:
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