Refer to the Following Figure When Answering
Figure $c \rightarrow d$

Multiple Choice

Refer to the following figure when answering
Figure 15.1: The Labor Market
-Consider Figure 15.1, which is a representation of the labor market. If the state of Colorado decided to raise its sales tax rate, this would cause a shift from curve ________ because changes in taxes ________ in the stylized DSGE model.

A) $c \rightarrow d$ ; are reflected in the marginal produce of capital
B) $a \rightarrow b$ ; are identical to a change in income taxes
C) $a \rightarrow b$ are similar to a change in TFP
D) $d \rightarrow c$ ; negatively affected by TFP
E) None of these answers are correct.