According to the real business cycle theory, workers' decisions to work now versus later depend on
A) the real wage rate today but not the real wage rate in the future.
B) the money wage rate.
C) the real interest rate.
D) labor productivity.

Question

Quizplus · Accepted Answer

According to the real business cycle theory, workers' decisions to work now versus later are influenced by the real interest rate, as it affects the intertemporal substitution of labor.

According to the Real Business Cycle Theory, Workers' Decisions to Work