What is the effect of an increase in the income tax rate and more generous unemployment benefits on the labor market? An increase in the income tax rate and more generous unemployment benefits O A. decreases the supply of labor; decrease the supply of labor O B. decreases the supply of labor; increase the demand for labor O C. increases the demand for labor; increase the demand for labor O D. increases the demand for labor; decrease the supply of labor answer.

Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781305971509
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter15: Unemployment
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What is the effect of an increase in the income tax rate and more generous unemployment benefits on the labor market?
An increase in the income tax rate
and more generous unemployment benefits
O A. decreases the supply of labor; decrease the supply of labor
O B. decreases the supply of labor; increase the demand for labor
O C. increases the demand for labor; increase the demand for labor
O D. increases the demand for labor; decrease the supply of labor
answer.
Transcribed Image Text:What is the effect of an increase in the income tax rate and more generous unemployment benefits on the labor market? An increase in the income tax rate and more generous unemployment benefits O A. decreases the supply of labor; decrease the supply of labor O B. decreases the supply of labor; increase the demand for labor O C. increases the demand for labor; increase the demand for labor O D. increases the demand for labor; decrease the supply of labor answer.
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