In Reference to Welfare Recipients,the High Effective Marginal Tax Rate

Multiple Choice

In reference to welfare recipients,the high effective marginal tax rate on earnings _____

A) encourages people to become self-employed.
B) encourages more labor market activity.
C) may discourage self-sufficiency.
D) increases total family income if the marginal tax rate exceeds 100 percent.
E) tends to increase welfare benefits as more income is earned up to the "means-test" threshold.