The More Permanent an Employee Perceives an Increase in Her

Multiple Choice

The more permanent an employee perceives an increase in her real wages to be

A) the larger the income effect is and the more likely it is that the quantity of labour supplied will be increased.
B) the larger the income effect is and the more likely it is that the quantity of labour supplied will be reduced.
C) the larger the substitution effect is and the more likely it is that the quantity of labour supplied will be increased.
D) the larger the substitution effect is and the more likely it is that the quantity of labour supplied will be reduced.