Intertemporal Substitution of Labour Suggests That

Multiple Choice

Intertemporal substitution of labour suggests that

A) the substitution effect of a permanent increase in the real wages is larger than the substitution effect of a temporary change in the real wage.
B) the substitution effect of a permanent increase in the real wages is smaller than the substitution effect of a temporary change in the real wage.
C) the substitution effect of a permanent increase in the real wages is equal to the substitution effect of a temporary change in the real wage.
D) hours worked are not affected by changes in real wages.
E) in the short run, the substitution effect of an increase in the real wage does not outweigh the income effect.