The Nominal Interest Rate Affects the Opportunity Cost of Leisure

question 14

Multiple Choice

The nominal interest rate affects the opportunity cost of leisure because

• A) of the delay in when a consumer works and when they can spend the wage income.
• B) the subsitution effect dominates the income effect.
• C) the income effect dominates the substitution effect.
• D) there is no delay in when the consumer works and can spend the wage income.
• E) additional leisure requires the consumer to borrow.

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