Intertemporal Substitution of Labour Suggests That

question 37

Multiple Choice

Intertemporal substitution of labour suggests that

• A) the substitution effect of a permanent increase in the real wages is larger than the substitution effect of a temporary change in the real wage.
• B) the substitution effect of a permanent increase in the real wages is smaller than the substitution effect of a temporary change in the real wage.
• C) the substitution effect of a permanent increase in the real wages is equal to the substitution effect of a temporary change in the real wage.
• D) hours worked are not affected by changes in real wages.
• E) in the short run, the substitution effect of an increase in the real wage does not outweigh the income effect.

---

Definitions:

Insurance Company

A business entity that provides financial coverage to individuals and entities against potential losses or damages in exchange for premium payments.

Insurable Interest

A stake in the value of an entity or thing that provides a legal right or requirement to insure it.

Insurance Contract

A legally binding agreement between an insurance company and the policyholder, specifying the terms for the payment of insurance benefits.

Insuring Property

The act of purchasing insurance to protect against loss or damage to property due to hazards like fire, flood, or theft.