In the RBC model,the importance of "intertemporal substitution" of labor supply is ________,which results in a rather ________ labor supply curve.
A)denied,flat
B)denied,steep
C)emphasized,flat
D)emphasized,steep

Question

Quizplus · Accepted Answer

In the Real Business Cycle (RBC) model, the concept of "intertemporal substitution" of labor supply is emphasized, suggesting that individuals will adjust their labor supply in response to changes in wages over time. This leads to a more elastic (or flat) labor supply curve, as people are more willing to change the amount of labor they supply in response to wage changes.

In the RBC Model,the Importance of "Intertemporal Substitution" of Labor