If Transfer Payments Are Related to Characteristics of Households Like

question 54

Multiple Choice

If transfer payments are related to characteristics of households like income, then an increase in the marginal tax on labour income, _w,:

• A)will have smaller effects in the market clearing model.
• B)will have stronger effects in the market clearing model.
• C)will have the same effects in the market clearing model.
• D)will have no effects in the market clearing model.

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