When Wages Increase,the Income Effect

question 109

Multiple Choice

When wages increase,the income effect

• A) increases the quantity of labor supplied
• B) increases the supply of labor.
• C) decreases the quantity of labor supplied
• D) decreases the supply of labor.

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Definitions:

Equity Capital

The amount of money that is invested into a business by its owners in exchange for a share of ownership.

Dividend Payments

Distribution of a portion of a company's earnings to its shareholders, usually in cash or additional stock.

Dividend Yield Ratio

A financial ratio that shows how much a company pays out in dividends each year relative to its stock price.

Earnings Per Share

A company's profit divided by its number of common shares outstanding, indicating how much money it makes per share.