Assume That Consumption When Young and Consumption When Old Are

question 244

Multiple Choice

Assume that consumption when young and consumption when old are both normal goods. The income effect of an increase in the interest rate will result in

• A)an increase in saving when young.
• B)an increase in saving when old.
• C)a decrease in saving when young.
• D)a decrease in saving when old.

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Definitions:

Trust

A fiduciary relationship in which one party, known as a trustee, holds property or assets for the benefit of another party, the beneficiary.

Relationship

The way in which two or more concepts, objects, or people are connected, or the state of being connected or related.

Assent

Agreement or approval, typically given willingly by a person who possesses the capacity to form intent.

Unilateral Mistake

An error made by only one party in a contract that does not necessarily invalidate the agreement, but may be grounds for its rescission if certain conditions are met.