The ________ effect means that, other things remaining the same, the higher the wage rate, the less time people will spend working and the more time people will spend at leisure.

Question

Quizplus · Accepted Answer

The income effect suggests that as wages increase, individuals may choose to work less because they can maintain the same standard of living with fewer hours, opting instead for more leisure time.

The ________ Effect Means That, Other Things Remaining the Same