Assume that the income effect dominates the substitution effect. When wages rise
A. people will work more hours.
B. the effect on the hours people work is ambiguous.
C. people will work the same number of hours.
D. people will work fewer hours.
Answer: D
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Correlation means
A) "on the margin." B) the tendency for the values of two variables to move in a predictable and related way. C) other things remaining the same. D) "after this, therefore because of this." E) a natural experiment has been conducted.
Refer to the scenario above. The total value in your account, at the end of a year, is equal to:
A) $520. B) $525. C) $550.50. D) $572.
Part of the spending on the Doyle Drive project in northern California came from the American Reinvestment and Recovery Act, which is an example of discretionary fiscal policy aimed at increasing
A) tax revenues and the federal budget surplus. B) the money supply and money demand. C) disposable income and interest rates. D) real GDP and employment.
If the Federal Reserve sells $10 million in government securities in the open market, with a 10 percent required reserve ratio on deposits, the maximum increase in deposits would be
a. -$50 million. b. -$100 million. c. $10 million. d. $100 million. e. none of the above