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An increase in income taxes _______ the tax wedge, and an increase in taxes on consumption expenditure _______ the tax wedge. A. increases; increases B. increases; does not change C. decreases; decreases D. does not change; increases

An increase in income taxes _______ the tax wedge, and an increase in taxes on consumption expenditure _______ the tax wedge. A. increases; increases B. increases; does not change C. decreases; decreases D. does not change; increases

Economics (MindTap Course List)
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter18: Debates In Macroeconomics Over The Role And Effects Of Government
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How do income taxes and taxes on consumption expenditure influence the tax wedge?
 
An increase in income taxes _______ the tax wedge, and an increase in taxes on consumption expenditure _______ the tax wedge.
 
 
A.
increases; increases
 
B.
increases; does not change
 
C.
decreases; decreases
 
D.
does not change; increases
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