Question: Question 28 (10 points) Listen Tax changes generally create both substitution effects and income effects. Income effects can sometimes lead to counterintuitive responses to tax

Question 28 (10 points) Listen Tax changes
Question 28 (10 points) Listen Tax changes generally create both substitution effects and income effects. Income effects can sometimes lead to counterintuitive responses to tax policy a) Explain why a worker might choose to work MORE hours in response to an increase in the income tax rate. b) Explain why a saver might choose to save MORE money in response to an increase in taxation of the returns on her savings

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