There Are Two Societies, a and B, That Are Alike

question 193

Multiple Choice

There are two societies, A and B, that are alike in every way but one. In society A, people have a high rate of time preference, and in society B, people have a low rate of time preference. It follows that

• A)the demand for consumption loans will probably be lower in A than B.
• B)interest rates will be lower in B than A.
• C)there will be more saving in A than B.
• D)interest rates will be lower in A than B.

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Definitions:

Unit Value

The worth assigned to a single unit of an item, used to calculate cost, quantity, or other statistical measures.

Fraction

A mathematical expression representing a part of a whole, displayed as a numerator over a denominator.

Percentage

A numerical value representing a part of 100, signaled by a fraction or ratio.

Subtract

To take away a number or amount from another, leaving a difference.