Which of the Following Statements Concerning Higher Marginal Tax Rates

question 9

Multiple Choice

Which of the following statements concerning higher marginal tax rates is correct?

• A)They encourage work effort and make more people eligible for welfare benefits.
• B)They discourage work effort and make fewer people eligible for welfare benefits.
• C)They encourage work effort and make fewer people eligible for welfare benefits.
• D)They discourage work effort and make more people eligible for welfare benefits.

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Definitions:

Labor Union

An organization formed by workers in the same sector or industry to negotiate wages, hours, benefits, and working conditions with employers.

Labor Hours Demanded

The total number of working hours that employers are willing to hire based on the current wage level.

Widget Industry

A hypothetical or generic term often used to refer to any industry or sector producing a common, unspecified product for illustrative purposes.

AFL-CIO

The American Federation of Labor and Congress of Industrial Organizations, a federation of unions that represents workers.