Explain all right as well as wrong options In 1986 Congress drastically cut the marginal tax rate on upper income levels from 50% to 28%. Empirical evidence analyzing the labor supply effects of the tax cut found that women in the high income tax bracket Select one: A. reduced their labor force participation and hours worked significantly because of a dominant income effect. B. increased both labor force participation and hours of work significantly. C. experienced offsetting substitution and income effects. D. did not respond in any significant way to the tax cut, as their high level of income ensured that they were already content with their labor supply choices.
Explain all right as well as wrong options In 1986 Congress drastically cut the marginal tax rate on upper income levels from 50% to 28%. Empirical evidence analyzing the labor supply effects of the tax cut found that women in the high income tax bracket Select one: A. reduced their labor force participation and hours worked significantly because of a dominant income effect. B. increased both labor force participation and hours of work significantly. C. experienced offsetting substitution and income effects. D. did not respond in any significant way to the tax cut, as their high level of income ensured that they were already content with their labor supply choices.
Chapter12: Income Distribution, Poverty, And Discrimination
Section: Chapter Questions
Problem 12SQ
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Question
Explain all right as well as wrong options
In 1986 Congress drastically cut the marginal tax rate on upper income levels from 50% to 28%. Empirical evidence analyzing the labor supply effects of the tax cut found that women in the high income tax bracket
Select one:
A.
reduced their labor force participation and hours worked significantly because of a dominant income effect.
B.
increased both labor force participation and hours of work significantly.
C.
experienced offsetting substitution and income effects.
D.
did not respond in any significant way to the tax cut, as their high level of income ensured that they were already content with their labor supply choices.
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