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If the wage rate rises, consumption:

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If the wage rate rises, consumption:

If the wage rate rises, consumption:
A) rises because the income and substitution effects are working in opposite directions to change consumption.
B) falls because the income and substitution effects are working in opposite directions to change consumption.
C) rises because the income and substitution effects are both working in the same direction to increase consumption.
D) falls because the income and substitution effects are both working in the same direction to decrease consumption.

Textbook

Principles of Macroeconomics

Edition: 11^th

Authors: Case, Fair, Oster

Read 168 times

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8 years ago

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