An Increase in the Tax Rate on Wages Results in

question 7

Multiple Choice

An increase in the tax rate on wages results in

• A)both a lower equilibrium real wage and a lower equilibrium level of employment.
• B)no changes in the equilibrium real wage and the equilibrium level of employment.
• C)both a higher equilibrium real wage and a higher equilibrium level of employment.
• D)a higher equilibrium real wage and a lower equilibrium level of employment.
• E)a lower equilibrium real wage and a higher equilibrium level of employment.

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Definitions:

Negative Reinforcement

A psychological principle involving the removal of an unpleasant stimulus to increase the likelihood of a desired behavior occurring again.

Law of Contingent Reinforcement

A principle stating that the effectiveness of reinforcement depends on its delivery contingent upon the occurrence of a specific behavior.

Organizational Behavior Modification

Organizational behavior modification is the use of extrinsic rewards to systematically reinforce desirable work behavior and discourage undesirable behavior.

Reinforcement

The delivery of a consequence as a result of behavior.