For Which of the Following Workers Would the Income Effect

question 27

Multiple Choice

For which of the following workers would the income effect be more likely to outweigh the substitution effect of an increase in wage?

• A)Gardener
• B)Teacher
• C)Professional athlete
• D)Plumber

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Definitions:

Money Supply

The total amount of monetary assets available in an economy at any given time, including cash, coins, and balances held in checking and savings accounts.

United States Treasury

The government department responsible for managing federal finances, including issuance of currency and management of government accounts.

Store Of Value

An asset that can be saved, retrieved, and exchanged at a later time, maintaining its value over time.

Checkable Deposits

are bank accounts that allow the account holder to write checks to third parties. Checkable deposits include checking accounts and are considered very liquid.