Which of the Following Statements Is Not Correct

question 48

Multiple Choice

Which of the following statements is not correct?

• A) If Jane gets a higher wage and works more, the substitution effect is greater than the income effect for her.
• B) If Spencer experiences a wage decrease and works less, the income effect is greater than the substitution effect for him.
• C) If the substitution effect is greater than the income effect, the labor-supply curve is upward sloping.
• D) If the income effect is greater than the substitution effect, the labor-supply curve is downward sloping.

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Definitions:

Venture Capital

Money invested in a business by another business firm or group of individuals in exchange for an ownership share.

Commercial Paper

A short-term financial obligation without collateral, provided by companies typically to fund accounts receivable, stock, and to settle short-term debts.

Trade Credit

An arrangement where a supplier allows a customer to purchase goods or services and pay for them at a later date.

Factoring

Factoring is a financial transaction where a business sells its accounts receivable to a third party at a discount in exchange for immediate cash.