Recall the Application about French restaurants and the Value Added Tax (VAT) to answer the following question(s).Recall the Application. According to the Application, how would lowering the VAT on restaurants with sit-down meals result in more employment in the industry?
A. A lower VAT lowers the price of the meals, increasing the quantity demanded for meals and increasing the demand for workers.
B. A lower VAT raises the price of the meals, increasing the quantity demanded for meals and increasing the demand for workers.
C. A lower VAT lowers the price of the meals, increasing the tips that workers received and inducing these workers to eat out.
D. A lower VAT raises the government's tax revenues, allowing the government to purchase more meals and hiring more workers.
Answer: A
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