The RBC approach has workers allocating their labor effort over blocks of time,with periods of intense activity when wages are high alternating with slack periods of vacation and leisure.This makes the labor supply curve rather ________,with unemployment an entirely ________ phenomenon.
A)steep,voluntary
B)steep,involuntary
C)flat,voluntary
D)flat,involuntary

Question

Quizplus · Accepted Answer

The RBC approach suggests that workers allocate their labor effort over time, with alternating periods of high activity and wages followed by leisure and vacation. This approach leads to a flat labor supply curve, as workers choose how much to work based on their preferences and leisure time. Unemployment in this model is entirely voluntary, as individuals can choose to work or not work based on their preferred balance between leisure and income. Therefore, the answer is C, flat and voluntary.

The RBC Approach Has Workers Allocating Their Labor Effort Over