Case Study: Country C is debating the introduction of a progressive income tax system to address income inequality.
Question: What are the likely effects of implementing a progressive income tax in Country C on income distribution, economic behavior, and tax revenue, and how might it impact high earners?
A) Reduced income inequality, potential change in work and investment incentives for high earners, increased tax revenue.
B) Increased income inequality, no change in economic behavior, decreased tax revenue.
C) No impact on income distribution, decreased tax revenue, increased investment by high earners.
D) Reduced income inequality, increased tax evasion, no change in tax revenue.