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Macroeconomics

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Moderate

Labor-Leisure Decision, Increase in Non-Labor Income

MACRO-NWZWAE

In a model where households face a labor-leisure decision (where leisure and consumption are both income normal goods), an increase in non-labor income will cause the household to unambiguously

A

work more and consume more goods.

B

work less and consume more goods.

C

work more and consume fewer goods.

D

work less and consume fewer goods.