In the Two-Period Model, a Higher Real Interest Rate

question 55

Multiple Choice

In the two-period model, a higher real interest rate

• A)increases the present value of income.
• B)causes the budget constraint to rotate in a counterclockwise direction.
• C)makes households that had initially planned to save better off.
• D)makes households that had initially planned to borrow better off.

---

Definitions:

Microvilli

Tiny, finger-like extensions of the plasma membrane of cells, especially epithelial cells, which increase surface area for absorption.

Proximal Tubule

The portion of the nephron in the kidney closest to the renal corpuscle, involved in the reabsorption of water, ions, and nutrients.

Nephron Loop

Also known as the loop of Henle, the nephron loop is a section of the kidney nephron responsible for concentrating urine and conserving water and salts.

Glomerular Capsular Space

The glomerular capsular space, also known as Bowman's space, is part of the kidney nephron that encloses the glomerulus and is involved in the filtration process of blood to form urine.