How would eliminating income tax likely affect the total employment and the natural rate of unemployment?

Multiple choice question for Aggregate Supply, Unemployment And Inflation. Select an option, then review the explanation below.

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raise employment and lower the unemployment rateraise employment and raise the unemployment ratedecrease employment and raise the unemployment ratedecrease employment and lower the unemployment ratehave no impact on employment or unemployment

Explanation

Removing income tax tends to increase workers' take-home pay, encouraging more people to join the labor force, which raises employment levels. This also typically reduces the equilibrium unemployment rate as more individuals find jobs.

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How would eliminating income tax likely affect the total employment and the natural rate of unemployment?

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