What is the intertemporal substitution hypothesis, Microeconomics

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What is the intertemporal substitution hypothesis

Problem

1. Discuss the impact of the VI system on a job seeker's search behavior. Discuss the impact of the VI system on the firm's layoff behavior.

2. What is the intertemporal substitution hypothesis? Does this argument provide a convincing account of the cyclical trend in the unemployment rate?

3. What is the sectoral shifts hypothesis?

4. Why do implicit contracts generate unemployment?

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.

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