Multiple Choice
A reduction in the marginal tax rate can cause potential output to increase by:
A) encouraging early entry into the labor market by reducing the incentive to earn advanced degrees.
B) increasing after-tax wage rates and thus allowing workers to work fewer hours.
C) increasing the incentive to invest more in education and earn advanced degrees.
D) increasing government revenues and thus government expenditure.
Correct Answer:
Verified
Correct Answer:
Verified
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