The Tendency to Reduce Current Consumption and Increase Future Consumption

question 63

Multiple Choice

The tendency to reduce current consumption and increase future consumption as the real interest rate increases is called

• A)the substitution effect of the real interest rate on saving.
• B)the income effect of the real interest rate on saving.
• C)the net effect of the real interest rate on saving.
• D)the substitution effect of the real interest rate on investment.

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