Question
The government is considering raising the tax rate on labor income and asks you to report on the supply-side effects of such an action. Use
The government is considering raising the tax rate on labor income and asks you to report on the supply-side effects of such an action.
Use appropriate graph and report directions of change, not exact magnitudes. What will happen to
- The supply of labor and why?
- The demand of labor and why?
- Equilibrium employment and why?
- The equilibrium before-tax wage rate and why?
- The equilibrium after-tax wage rate and why?
- Potential GDP?
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Macroeconomics Canada in the Global Environment
Authors: Michael Parkin, Robin Bade
8th edition
321778103, 978-0321808370, 321808371, 978-0321778109
