The Nominal Interest Rate Affects the Opportunity Cost of Leisure

question 55

Multiple Choice

The nominal interest rate affects the opportunity cost of leisure because

• A) of the delay in when a consumer works and when they can spend the wage income.
• B) the substitution effect dominates the income effect.
• C) the income effect dominates the substitution effect.
• D) there is no delay in when the consumer works and can spend the wage income.
• E) additional leisure requires the consumer to borrow.

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Definitions:

General Journal

A primary accounting record where all types of financial transactions are initially recorded in chronological order before being posted to specific accounts in the general ledger.

Cash Receipts Journal

A specific financial journal used in accounting to record all cash inflows to a business.

Sales Journal

A specialized accounting ledger that records all sales transactions of a business, typically for goods or services on credit.

Cash Receipts Journal

A specialized accounting journal used to keep track of all cash inflows or receipts of a business.