If the Present Value of Assets at the End of Year

question 46

Multiple Choice

If the present value of assets at the end of year two is constant, an increase in the present value of sources of funds must cause:

• A)consumption in periods one and two to rise.
• B)consumption in periods one and two to fall.
• C)consumption to rise in period one and fall in period two.
• D)consumption to fall in period one and rise in period two.

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