Rose travels back in time to deposit $100 in a high-interest-bearing savings account. When she returns to the present, she is a billionaire. We can expect Rose to work ________ hours because of the _________ effect.
A) more; substitution
B) more; income
C) fewer; substitution
D) more; labor-leisure
E) fewer; income

Question

Quizplus · Accepted Answer

Rose is likely to work fewer hours due to the income effect, as her wealth has increased significantly, reducing her need to work for income.

Rose Travels Back in Time to Deposit $100 in a High-Interest-Bearing