The correct answer is: a)
Reason: the effect on labor market participation will totally depends on the substitution and income effect of the policy change described above which may either decrease labor market participation or increase or keep constant.
Thanks!
The government institutes a flat income tax, along with a refundable tax credit that everyone receives...
The nation of Freedonia is considering the adoption of three healthcare policies, each of which would be funded by a new flat tax of t% on labor income. In each case, explain and illustrate the combined effects the new policy (including the tax) would have on labor market participation, hours worked and utility for people at various levels of current income and hours worked. For simplicity, you may assume that all consumption consists of healthcare. The new healthcare program is...
Suppose that the Earned Income Tax Credit is set up so that a maximum payment of $3,000 can be earned when a qualified worker earns $10,000. This payment represents a subsidy of 30 cents for each additional dollar earned up to $10,000. Workers earning between $10,000 and $14,000 are eligible for the maximum payment. Once labor market earnings exceed $14,000, additional earnings reduce the subsidy by 45 cents for each dollar earned. The going wage rate is $10 per hour....
6) in the U.S., which is not a specific stated goal of Government policies?: a) price stability b) full employment c) growth d) social well-being (welfare, or "happiness") 7) The unemployment rate is defined as: a) civilian labor force/civilian non-institutional population b) unemployed/civilian labor force 0) discouraged workers/civilian labor force d) none of the above , 8) The term "final goods" refers to: a) raw materials b) goods whose value has been adjusted for changes in the price level c)...