He weighs the value of taking a lower-paid job that might be easily available a machinist might become a day laborer against the value of a better-paid, more suitable job that is harder to find.
Business Cycles pose a special challenge for new classical economists: How are large fluctuations in output compatible with the two fundamental tenets of their doctrine? I am a New York City based photographer.
But since the debt must be repaid with interest, a rational taxpayer would save the entire windfall in order to afford the future tax bill, leaving his expenditure unchanged.