True or False?
The statement is false. It simply repeats in different language the assertion that the supply curve is upward sloping, without telling us why. The reason for the upward slope is that a higher nominal wage rate, given the general price level, while viewed as temporary, causes workers to substitute work for leisure. The temporary rise in the real wage rate increases the opportunity cost of leisure, causing workers to choose less of it. The level of the supply curve of labour reflects workers' expectations of what the (unobservable) price level will turn out to be in the current period. Movements along the curve thus imply changes in the expected real wage rate.