Which one of the following conclusions is not supported by the intertemporal substitution hypothesis?
A. Hours of work increase as the wage rises and decline as the wage falls.
B. Hours of work over the life cycle will be inversely related to wages over the life cycle.
C. An unemployed person might choose to become a discouraged worker during a low-wage recession with an eye toward returning to the labor market when wages increase.
D. The profile of hours of work over the life cycle will have roughly the same shape as the age-earnings profile.
E. A high wage worker may choose to work 60+ hours a week during her peak wage years in order to retire at a younger age later in life.
Answer: B
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Which of the following statements is true?
A) The marginal cost curve intersects the average fixed cost curve at its minimum point. B) When marginal cost is greater than average fixed cost, average fixed cost increases. C) Average fixed cost does not change as output increases. D) As output increases, average fixed cost becomes smaller and smaller.
A decrease in the riskiness of corporate bonds will ________ the yield on corporate bonds and ________ the yield on Treasury securities, everything else held constant
A) increase; increase B) decrease; decrease C) increase; decrease D) decrease; increase
Markets coordinate economic activity through:
A. commanding individuals what to do. B. the price mechanism. C. the legal mechanism. D. asking individuals what to do.
Increasing investment in the present means forgoing future consumption.
Indicate whether the statement is true or false