Which of the Following Statements About the Income Effect of an Income

Multiple Choice

Which of the following statements about the income effect of an income tax rate increase is true?

A) The income effect is theoretically stronger for low-income taxpayers than for high-income taxpayers.
B) The income effect is theoretically stronger for a family's secondary wage earner than for the family's primary wage earner.
C) The income effect motivates individuals to find ways to increase their before-tax income.
D) Both the income effect is theoretically stronger for low-income taxpayers than for high-income taxpayers and the income effect motivates individuals to find ways to increase their before-tax income are true.