In 2007, Germany Increased the Value Added Tax (VAT) on Consumption

question 192

Multiple Choice

In 2007, Germany increased the value added tax (VAT) on consumption from 16 percent to 19 percent. According to the supply-side view

• A) the incentive to work increases.
• B) the supply of labor increases.
• C) there will be an increase in potential GDP due to the increase tax revenue.
• D) the after-tax wage rate falls.

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