The Substitution Effect of a Wage Increase

question 186

Multiple Choice

The substitution effect of a wage increase

• A)probably leads most workers to want to work more.
• B)certainly leads all workers to want to work more.
• C)probably leads most workers to want to work less.
• D)certainly leads most firms to want to employ more workers.

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Definitions:

Consumer Credit

A financial arrangement that allows individuals to purchase goods or services now and pay for them in the future.

Trade Credit

A form of credit extended by suppliers to their customers, allowing them to purchase goods or services and pay for them at a later date.

Insufficient Credit

A condition where an individual or entity lacks the necessary borrowing capacity due to limited credit history or poor credit ratings.

Open Charge Account

A type of credit account that allows customers to make purchases up to a pre-approved limit and pay for them at a later date.