Suppose a Person's Preferences Are to "Consumption Smooth",which Means They $C _ { 1 } = C _ { 2 }$

question 26

Multiple Choice

Suppose a person's preferences are to "consumption smooth",which means they wish to get $C _ { 1 } = C _ { 2 }$ for all incomes and interest rates $Y _ { 1 } = Y _ { 2 }$ .For any interest rate and ,the person will ____ in the first period.

• A)borrow
• B)save
• C)neither borrow nor save

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Definitions:

British Commanders

Military leaders from Britain who played significant roles in various conflicts, including during the Revolutionary War and the War of 1812 against the United States.

Hold on the South

A phrase indicating a strong influence or control over the southern United States, often used in historical contexts such as politics or social norms.

Benedict Arnold

An American military officer who served during the Revolutionary War before defecting to the British side in 1780.

Fort Ticonderoga

A historic fort in New York that played a strategic role in the American Revolutionary War after being captured by American forces in 1775.