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Suppose you are a macroeconomic consultant. The government is considering raising the tax rate on labour income and asks you to evaluate the supply- side

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Suppose you are a macroeconomic consultant. The government is considering raising the tax rate on labour income and asks you to evaluate the supply- side effects of such action. Explain the direction of change on the following. (5 marks each) a. the supply of labour b the demand for labour ( equilibrium employment d. the equilibrium before-tax wage and the equilibrium after tax wage change e. the aggregate supply curve

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