If the Substitution Effect of the Real Interest Rate on Saving

question 13

Multiple Choice

If the substitution effect of the real interest rate on saving is larger than the income effect of the real interest rate on saving,then a rise in the real interest rate leads to a ________ in consumption and a ________ in saving,for someone who's a lender.

• A)fall; fall
• B)fall; rise
• C)rise; rise
• D)rise; fall

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Definitions:

Guides

Individuals or resources that offer direction, advice, or information to help others navigate through specific situations or tasks.

Redirecting

The process of changing the direction or focus of something, often used in behavior management strategies.

Labeling

The process of assigning names or categories to objects, people, or phenomena, often influencing perception and behavior.

Calming

The process or act of making someone less agitated, anxious, or excited.