When wages increase, the income effect ________ the supply of labor and the substitution effect ________ the supply of labor.
A. decreases; increases
B. increases; decreases
C. increases; increases
D. decreases; decreases
Answer: A
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If Kenya institutes policies that support economic freedom and growth, it is likely that Kenya will
A) immediately reap the benefits of double digit increase in economic growth. B) immediately reap the benefits of a 4 percent to 6 percent increase in economic growth. C) slowly reap the benefits of economic growth as the economy grows over time. D) lose control of the economy and plunge into a long recession. E) suffer from too much competition within its economy.
You observe that more labor is employed and the wage rate increases. This set of events could have been the result of a
A) rightward shift of the labor demand curve. B) leftward shift of the labor supply curve. C) rightward shift of the labor supply curve. D) leftward shift of the labor demand curve.
The main determinant of how quickly expected inflation adjusts to changes in monetary policy is
A) the slope of the Phillips curve. B) the slope of the short-run aggregate supply curve. C) the credibility of the central bank. D) the degree of indexation in the economy.
The Environmental Protection Agency was established by the ______.
a. Endangered Species Act of 1973 b. Environment Act of 1986 c. Clean Air Act of 1970 d. Civil Rights Act of 1964