Workers work for after-tax wages,thus an income tax represents a reduction in the effective wage rate.

Name: Workers work for after-tax wages,thus an income tax represents a reduction in the effective wage rate.
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Question

Quizplus · Accepted Answer

Since income tax takes a portion of a worker's earnings, it reduces their after-tax wages. This means the effective wage rate, the amount a worker earns after taxes, is lower than their nominal wage rate, the amount they earn before taxes. Therefore, the statement is true.

Workers Work for After-Tax Wages,thus an Income Tax Represents a Reduction