If there is a decrease in government purchases along with a decrease in the marginal tax rate on labour income, then:
A) the income effect would be toward a decrease in labour supply.
B) the overall effect on labour supply is uncertain.
C) the substitution effect would be towards an increase in labour supply.
D) all of the above.
Correct Answer:
Verified
Q22: The after tax real interest rate is:
A)r/
Q23: With an increase in government purchases financed
Q24: In the short run if the tax
Q25: If the real marginal tax rate,
Q26: In the long run an increase in
Q28: If the real marginal tax rate,
Q29: In the long run an increase in
Q30: In the short run if the tax
Q31: If there is a decrease in government
Q32: In the long run an increase in
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