Suppose that individuals view their loss of income from income taxes as offset by the benefits of

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Suppose that individuals view their loss of income from income taxes as offset by the benefits of public services purchased with the revenues. How are their labor supply decisions affected? (Hint: Decompose the change in hours worked into income and substitution effects.)

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Public Finance

ISBN: 9780073511283

8th Edition

Authors: Harvey Rosen, Ted Gayer

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