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An Increase in the Average Tax Rate,with the Marginal Tax

Question 27

Multiple Choice

An increase in the average tax rate,with the marginal tax rate held constant,will


A) increase the amount of labor supplied at any real wage.
B) not affect the amount of labor supplied at any real wage.
C) decrease the amount of labor supplied at any real wage.
D) increase the amount of labor supplied at any real wage if the average tax rate is above the marginal tax rate, but decrease the amount of labor supplied at any real wage if the average tax rate is below the marginal tax rate.

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