The Income Effect of an Increase in the Interest Rate

question 64

Multiple Choice

The income effect of an increase in the interest rate (when "Consumption when young" and "Consumption when old" are both normal goods) 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:

Avoiding Commitments

Actively steering clear of obligations, duties, or engagements that require dedicated involvement.

Self-disclosure

The act of sharing personal or private information about oneself with others, which can foster trust and build relationships.

Apology

An expression of regret or sorrow for having done wrong or caused harm, often accompanied by a request for forgiveness.

Relationship Repair

The process of mending or improving a relationship that has experienced conflict, misunderstanding, or estrangement.