An increase in the marginal tax rate, with the average tax rate held constant, will
a. increase the amount of labor supplied at any real wage.
b. increase the amount of labor supplied at any real wage if the average tax rate is above the marginal tax rate, but decrease the amount of labor supplied at any real wage if the average tax rate is below the marginal tax rate.
c. not affect the amount of labor supplied at any real wage.
d. decrease the amount of labor supplied at any real wage.
Answer: D
If the answers is incorrect or not given, you can answer the above question in the comment box. If the answers is incorrect or not given, you can answer the above question in the comment box.