Assume that the government proposes a negative income tax that calculates the taxes owed as follows: Taxes Owed = (1/3 Income) - 10,000 . If a family doesn't earn any income, how does the negative income tax affect it?
a. It will receive an income subsidy of $1,000.
b. It will receive an income subsidy of $3,000.
c. It will receive an income subsidy of $10,000.
d. It will not be affected at all, since the negative income tax requires a family to earn income.
c
Economics
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