A Higher Real Interest Rate Today Makes Current Consumption

question 17

Multiple Choice

A higher real interest rate today makes current consumption

• A)more expensive relative to future consumption because the return on savings is lowered.
• B)more expensive relative to future consumption because the return on savings is increased.
• C)less expensive relative to future consumption because the return on savings is increased.
• D)less expensive relative to future consumption because the return on savings is lowered.
• E)just as expensive as future consumption because the return on saving is uncertain.

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Definitions:

Relational Sources

Information about products or services that comes from personal relationships, such as friends, family, or colleagues.

Public Sources

Information available from non-confidential sources, such as government publications, libraries, and the Internet, that can be accessed by the general public.

Personal Sources

Individuals or personal contacts from whom one can obtain information, advice, or support, especially relevant in decision-making processes.

Evaluative Criteria

The standards or benchmarks that consumers use to compare and judge products or services during the decision-making process.