Question
Some economists argue that taxing capital has the benefit of increasing employment and wages because such taxes increase the demand for labor. Use an isoquant/isocost
Some economists argue that taxing capital has the benefit of increasing employment and wages because such taxes increase the demand for labor. Use an isoquant/isocost diagram to illustrate that the validity of this claim requires that the substitution effect be larger than the scale effect brought about by the tax on capital.
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Principles of economics
Authors: N. Gregory Mankiw
6th Edition
978-0538453059, 9781435462120, 538453052, 1435462122, 978-0538453042
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