Which One of the Following Conclusions Is Not Supported by the Intertemporal

question 26

Multiple Choice

Which one of the following conclusions is not supported by the intertemporal substitution hypothesis?

• A) The profile of hours of work over the life cycle will have roughly the same shape as the age-earnings profile.
• B) Hours of work over the life cycle will be inversely related to wages over the life cycle.
• C) Hours of work increase as the wage rises and decline as the wage falls.
• D) 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.
• 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.

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