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.
Correct Answer:
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