Question

Jim is deciding whether to go to college. In each case below, discuss how, other things being equal, this factor will affect Jim's decision (i.e., whether, other things being equal, it will increase or reduce the likelihood that he will go to college):

A. interest rates rise

B. improvements in medicine make it possible for people to work longer and retire later in life

Answer 1

A) if the interest rate increases what happens is that the cost of borrowing for education increases as a result of which you can understand that he prefers to work rather than going for college because college gets more expensive and that is the reason why wear the likelyhood to go to college reduces

B) With the assumption of the fact that college education will give you higher earnings, if you have higher age of retirement what happens is that with the higher earnings the present worth of the the salary if you go to college will be lot higher than compared to that of case if you don't go to college in choose to work instead and that is the reason why in this case the likelihood of going to college increases