Intertemporal substitution of labour suggests that
◦ in the short run, the substitution effect of an increase in the real wage does not outweigh the income effect.
◦ hours worked are not affected by changes in real wages.
◦ 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.
◦ 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.
◦ 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.