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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