Suppose That an Economy with a Progressive Income Tax That

Suppose that an economy with a progressive income tax that began to assign tax liability at $10,000 were to go into a recession. If only those people at the lower end of the income distribution were laid off and filed for untaxed unemployment compensation, then the average tax rate computed across the remaining taxpayers would

A) necessarily fall because unemployment compensation transfers would maintain aggregate demand.
B) rise or fall depending on circumstance.
C) necessarily rise because people who previously faced relatively low tax rates would no longer be included in the average.
D) not be changed because the tax schedule was not altered.
E) none of the above.