High tax rates on interest and profits are disincentives. People may engage in “do it yourself” projects rather than paying someone to do the work, if they have to pay taxes on the services. People may not work overtime or second jobs if pushes them into higher tax bracket

High tax rates on interest and profits are disincentives. People may engage in “do it yourself” projects rather than paying someone to do the work, if they have to pay taxes on the services. People may not work overtime or second jobs if pushes them into higher tax bracket

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter16: Government Spends, Collects, And Owes

Section: Chapter Questions

Problem 20AA

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Question

Match the term to the definition:

	High tax rates on interest and profits are disincentives.
	People may engage in “do it yourself” projects rather than paying someone to do the work, if they have to pay taxes on the services.
	People may not work overtime or second jobs if pushes them into higher tax bracket

A.	The Work Effect
B.	The Savings and Investment Effect
C.	The Elimination of Productive Market Exchanges

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