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An Increase in Income Tax Shifts the Labour Supply Curve

Question 53

Multiple Choice

An increase in income tax shifts the labour supply curve ________, and the ________.


A) leftward; before-tax wage rate does not change
B) leftward; after-tax wage rate does not change
C) leftward; after-tax wage rate rises
D) rightward; before-tax wage rate rises
E) leftward; after-tax wage rate falls

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