Which one of the following statements regarding the intertemporal substitution hypothesis is false?
A) Workers are willing to reduce labor supplied during a recession.
B) Increases in unemployment may be voluntary as workers collect UI benefits.
C) Increases in unemployment may be voluntary as workers trade income for leisure during low-wage periods.
D) Wages and hours of leisure will tend to move together over the course of the life-cycle.
E) Labor supply responds to changes in the real wage.
Correct Answer:
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