Orporate tax rate and lowers income tax rate

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Consider the Roback model. City A raises corporate tax rate and lowers income tax rate at the same time. What does the Roback model imply about equilibrium before-tax wage and rent for the city? Justify your answer with a diagram. (You will not be able to calculate specific numerical answers. Focus on general directions. Clearly label all curves and axes.)

Reference no: EM132471863

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