When the Elasticity of Substitution in the Constant Elasticity of Substitution

question 4

True/False

When the elasticity of substitution in the constant elasticity of substitution utility function lies above 1, an increase in the interest rate will cause a saver to save less.

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Definitions:

Self-Efficacy

The belief in one's ability to succeed in specific situations or accomplish a task, which can influence how people approach goals, tasks, and challenges.

Achievement Motivation

The need, or desire, to attain a certain standard of excellence.

Achievement Motivation

The drive that propels individuals to strive for success, mastery, and to overcome obstacles.

Delayed Gratification

The skill to avoid succumbing to immediate pleasure, opting instead for a delayed but potentially greater reward.