MrOBKandle Has a Utility Function C₁c₂, Where C₁ Is His

question 10

Multiple Choice

Mr.O.B.Kandle has a utility function c₁c₂, where c₁ is his consumption in period 1 and c₂ is his consumption in period 2.He will have no income in period 2.If he had an income of $70,000 in period 1 and the interest rate increased from 10 to 17%,

• A)his savings would not change but his consumption in period 2 would increase by $2,450.
• B)his consumption in both periods would decrease.
• C)his consumption in both periods would increase.
• D)his savings would increase by 7% and his consumption in period 2 would also increase.
• E)his consumption in period 1 would decrease by 17% and his consumption in period 2 would also decrease.

---

Definitions:

Disorientation

A state of confusion or lack of direction, often experienced in unfamiliar situations or environments.

Perpetual Stress

A state of continuous or unending stress, often leading to adverse psychological and physical health effects.

Thinking Globally

The ability to understand and appreciate cultural differences and apply this awareness in business strategies or social interactions on a global scale.

Acting Locally

An approach focused on addressing issues and making positive changes within one's own community or region.