Any increase in the present value of taxes for the consumer implies
A)a decrease in lifetime wealth and an increase in current labour supply.
B)a decrease in lifetime wealth and a decrease in current consumption demand.
C)an increase in lifetime wealth and a decrease in current labour supply.
D)a decrease in lifetime wealth and a decrease in current labour supply.
E)an increase in lifetime wealth and an increase in current labour supply.

Question

Quizplus · Accepted Answer

An increase in the present value of taxes reduces the consumer's lifetime wealth, leading them to increase current labor supply to maintain their consumption levels.

Any Increase in the Present Value of Taxes for the Consumer