An increase in unearned income always creates a disincentive to work
Indicate whether the statement is true or false
False. The effect on labor supply will also depend on the individual's preferences towards work (leisure).
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Economists assume that most individuals act as if they are motivated by self-interest and respond in predictable ways to changing circumstances
a. True b. False Indicate whether the statement is true or false
Suppose one goal of the tax system was to achieve vertical equity. While people may disagree about what is "equitable," based on the marginal tax rates given for the two years, which of the following statements is true?
a. Vertical equity is possible in both years. b. Vertical equity is possible in 2009 but not in 2010. c. Vertical equity is not possible in 2009 but is possible in 2010. d. Vertical equity is not possible in either year.