If students decide to stay in college until a recession is over,they are practicing:
A) intertemporal substitution.
B) time bunching.
C) labor adjustment costs.
D) replacement wages.

Question

Quizplus · Accepted Answer

Intertemporal substitution refers to making decisions about when to consume goods, services, or invest in education based on different interest rates, income levels, or other external factors. In this case, students are delaying their consumption of labor (earning income) in order to wait for better economic conditions. This is an example of intertemporal substitution.

If Students Decide to Stay in College Until a Recession