Asked by
Mariam Alsaadi
on Dec 08, 2024
Verified
Firms may react to a payroll tax by
A) substituting labor for capital.
B) increasing their output.
C) shifting to more capital intensive techniques.
D) increasing workers' wages.
Payroll Tax
Taxes imposed on employers and/or employees, usually calculated as a percentage of the salaries that employers pay their staff.
Capital Intensive Techniques
Production processes that require a high investment in capital assets relative to labor.
- Gain insight into how tax policies influence economic conduct, particularly regarding tax incidence and the reallocation of tax liabilities.
- Investigate how certain taxes like luxury taxes and payroll taxes influence market activities and the state of economic equilibrium.
Verified Answer
SC
Learning Objectives
- Gain insight into how tax policies influence economic conduct, particularly regarding tax incidence and the reallocation of tax liabilities.
- Investigate how certain taxes like luxury taxes and payroll taxes influence market activities and the state of economic equilibrium.