An Increase in the Real Wage

question 63

Multiple Choice

An increase in the real wage

• A)has an ambiguous effect on both consumption and labour supply.
• B)increases consumption and decreases labour supply.
• C)unambiguously increases consumption and increases labour supply.
• D)increases consumption and has an ambiguous effect on labour supply.
• E)has an ambiguous effect on consumption and increases labour supply.

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Definitions:

Identity Diffusion

An identity status that characterizes those who have no commitments and who are not in the process of exploring alternatives.

James Marcia

A developmental psychologist known for his work on adolescent identity development and his theory of identity status.

Exploration

The act of searching or traveling for the purpose of discovery, especially in unfamiliar areas.

Commitment

The decision to devote oneself to a cause or another person.