When Consumption and Leisure Are Both Normal Goods,after an Increase

question 99

Multiple Choice

When consumption and leisure are both normal goods,after an increase in real dividend income minus taxation,the rational consumer

• A) increases consumption and increases labor supply.
• B) increases consumption and reduces labor supply.
• C) reduces consumption and increases labor supply.
• D) reduces consumption and reduces labor supply.

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Definitions:

Investment Account

An account held at a financial institution that is used to buy and hold various investment assets, like stocks, bonds, mutual funds, and ETFs, often used for long-term financial goals.

Equity Method

An accounting technique used to record the investments made in other companies, reflecting the investor's proportional share of the investee's net income or loss.

Undervalued Inventory

Undervalued inventory occurs when the recorded cost of inventory is less than its current market value, potentially misstating a company's financial position.

Carrying Value

The book value of an asset or liability on a company's balance sheet, calculated as the original cost minus accumulated depreciation or amortization.