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A government increases the national sales tax, which is applied to most goods and services. Assuming a worker's nominal take-home pay (the amount they receive after income taxes are deducted) does not change, what is the direct and immediate impact on the components that determine their real post-tax consumption wage ()?
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A government increases the national sales tax, which is applied to most goods and services. Assuming a worker's nominal take-home pay (the amount they receive after income taxes are deducted) does not change, what is the direct and immediate impact on the components that determine their real post-tax consumption wage ()?
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If a worker's nominal take-home pay (the amount received after income taxes) increases by 5% in a given year, their real purchasing power, as measured by the post-tax consumption wage, must also increase.