In a Two-Year Period,if a Higher Interest Rate Causes Consumption

question 45

Multiple Choice

In a two-year period,if a higher interest rate causes consumption in year 1 to rise:

• A)the income effect associated with the higher interest rate is greater than the substitution effect.
• B)the substitution effect associated with the higher interest rate is greater than the income effect.
• C)the income effect of the higher interest rate is negative.
• D)the substitution effect of the higher interest rate is positive.

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Definitions:

Legal Standards

Established norms and criteria in the legal system that actions and decisions must adhere to.

Moral Standards

Principles of right and wrong that are accepted by an individual or a social group.

Ethical Standards

A set of principles designed to guide behavior and decisions in a professional and personal context, based on notions of right and wrong, fairness, honesty, and integrity.

Data Collection

The process of gathering and measuring information on variables of interest in an organized manner.