Intertemporal substitution is:
A) the cost of shifting workers from declining sectors of the economy to the growing sectors.
B) the tendency for economic activities to be coordinated at common points in time.
C) the allocation of consumption,work,and leisure across time to maximize well-being.
D) a reduction in the value of collateral.

Question

Quizplus · Accepted Answer

Intertemporal substitution refers to the ability of individuals to allocate their consumption, work, and leisure across different points in time to maximize their overall well-being. It involves decisions about how much to save and invest, as well as how much to consume in the present versus in the future. This concept is central to the theory of intertemporal choice, which explores how individuals make decisions about allocating their resources over time.

Intertemporal Substitution Is