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Assuming That Charitable Giving Is a Normal Good, the Income

Question 51

Multiple Choice

Assuming that charitable giving is a normal good, the income effect of a decrease in personal tax rates would lead to


A) less giving because giving to charity would become more expensive relative to other goods.
B) more giving because giving to charity would become less expensive relative to other goods.
C) more giving because households would have more disposable income.
D) less giving because households would spend that money on luxury goods.

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