Which of the following hypotheses is consistent with fewer hours worked per year in Europe than in the United States?
A) fewer mandated holidays in Europe than in the United States
B) higher employment-to-population ratios in Europe than in the United States
C) higher tax rates in Europe than in the United States
D) a smaller underground economy in Europe than in the United States

Question

Quizplus · Accepted Answer

Higher tax rates in Europe than in the United States can lead to fewer hours worked per year in Europe because higher taxes reduce the net benefit of working additional hours, potentially making individuals less inclined to work more.

Which of the Following Hypotheses Is Consistent with Fewer Hours