A decrease in which of the following would decrease the tax wedge?
A)marginal tax rate
B)money supply
C)national debt
D)federal budget deficit

Question

Quizplus · Accepted Answer

The tax wedge is the difference between what employers pay employees and what employees receive after taxes. If the marginal tax rate decreases, the tax burden on both employers and employees decreases, which reduces the tax wedge. Therefore, A is the best choice because the other options are unrelated to the tax wedge.

A Decrease in Which of the Following Would Decrease the Tax