Your Boss Has Told You That You Will Receive an Increase

Multiple Choice

Your boss has told you that you will receive an increase in your salary next year.In response to this news,you would reduce your labour supply because

A) the income effect would be equal to the substitution effect.
B) the substitution effect would be stronger than the income effect.
C) there would be an income effect but no substitution effect.
D) there would be a substitution effect,but no income effect.