Asked by
Guillermo Jimenez
on Dec 08, 2024Verified
Firms may react to a payroll tax by
A) substituting labor for capital.
B) reducing their output.
C) shifting to less capital intensive techniques.
D) hiring more labor.
Capital Intensive Techniques
Production methods that require a higher investment in physical capital rather than labor.
Payroll Tax
Impositions required from employers or employees, consistently based on a proportion of the payment to laborers.
- Learn about the essence of tax incidence and the dynamics of shifting tax liabilities.
Verified Answer
KN
Learning Objectives
- Learn about the essence of tax incidence and the dynamics of shifting tax liabilities.