An increase in taxes on labor income ________ the labor supply curve and ________ the labor demand curve.

Question

Quizplus · Accepted Answer

An increase in taxes on labor income shifts the labor supply curve because it affects the net income workers receive, thus potentially altering their willingness to supply labor. However, it does not directly shift the labor demand curve, which is determined by employers' willingness to hire at different wage rates.

An Increase in Taxes on Labor Income ________ the Labor