We would expect, all else equal, that _______ on wage income would _______ unemployment.

Question

Quizplus · Accepted Answer

Lower taxes would increase the take-home pay of workers, potentially increasing their willingness to work and reducing unemployment. Higher taxes, on the other hand, would decrease the take-home pay of workers, potentially reducing their willingness to work and increasing unemployment. Therefore, lower taxes would be expected to reduce unemployment, while higher taxes would be expected to increase unemployment.

We Would Expect, All Else Equal, That _______ on Wage