If the Intertemporal Substitution Hypothesis Is Correct, Then

question 25

Multiple Choice

If the intertemporal substitution hypothesis is correct, then

• A) the unemployment rate is always artificially high.
• B) the unemployment rate is always artificially low.
• C) discouraged workers should be included in the unemployed population because they actually want a job at the going wage.
• D) discouraged workers should not be included in the unemployed population because they are optimally choosing more leisure during a time of low wages.
• E) discouraged workers will not exist.

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Definitions:

Neural Storage

refers to the process by which the brain encodes, stores, and retrieves information.

Long-Term Memory

A type of memory responsible for the storage of information over an extended period, ranging from days to decades.

Memory Consolidation

The method through which memories from the short-term are converted into long-term storage.

Long-Term Storage

Describes the phase of memory in which information is retained for extended periods of time, ranging from minutes to a lifetime.