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Peregrinus Peregrinus
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6 years ago
The government raises taxes on wages by 20% and splits the money evenly across households as "free money" such that the average household gets back what it paid extra in taxes. In a household where the dollars collected by the 20% added tax initially equals the dollars received as free money, their work hours are likely to
A) increase.
B) decrease.
C) increase if the income effect dominates the substation effect.
D) remain unchanged.
Textbook 
Modern Labor Economics: Theory and Public Policy

Modern Labor Economics: Theory and Public Policy


Edition: 12th
Authors:
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alanialani
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6 years ago
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Peregrinus Author
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6 years ago
Good timing, thanks!
Lawson1981
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Yesterday
You make an excellent tutor!
Holly72492
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2 hours ago
Correct Slight Smile TY
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