Suppose that under a new law all businesses must pay a tax equal to 6% of their

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Suppose that under a new law all businesses must pay a tax equal to 6% of their sales revenue. Assume that this tax is not passed on to consumers. Instead, consumers pay the same prices after the tax is imposed as they did before. What is the effect of this tax on labour demand? If the labour supply curve is unchanged, what will be the effect of the tax on employment and the real wage?
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Macroeconomics

ISBN: 978-0321675606

6th Canadian Edition

Authors: Andrew B. Abel, Ben S. Bernanke, Dean Croushore, Ronald D. Kneebone

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