If the marginal tax rate rises above t * = 63%, tax revenue will decre
If the marginal tax rate rises above t * = 63%, tax revenue will decrease because
A) workers refuse to pay taxes since the tax rate is too high.
B) workers are in the downward-sloping portion of labor supply.
C) workers reduce working hours in response to the wage loss.
D) None of the above.
ANSWER
C
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