Which of the Following Causes an Increase in Labor Supply

question 6

Multiple Choice

Which of the following causes an increase in labor supply?

• A) when wages and the price level increase proportionately
• B) a decrease in income tax rates
• C) a decrease in the general price level
• D) a decrease in transfer payments

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Definitions:

Interdependence

Interdependence is a condition where entities are mutually reliant on each other, implying that actions of one can significantly impact the others.

Businesses

Economic entities (firms) that purchase resources and provide goods and services to the economy.

Product Markets

Markets where goods and services are bought and sold, connecting buyers and sellers.

Households

Economic units consisting of all individuals living in a single residence, making decisions about consumption, savings, and investment.