If Current and Future Consumption Are Both Normal Goods, an Increase

question 4

Multiple Choice

If current and future consumption are both normal goods, an increase in the interest rate will necessarily

• A)cause savers to save more.
• B)cause borrowers to borrow less.
• C)reduce everyone's current consumption.
• D)make everyone worse off.
• E)None of the above.

---

Definitions:

Needles

Thin, pointed metal instruments used for sewing or as a part of medical devices such as syringes for injecting substances into the body.

Syringes

Medical devices used to inject or withdraw fluids, consisting of a needle attached to a hollow cylinder fitted with a sliding plunger.

Lubricating Gel

A substance applied to reduce friction between moving surfaces or parts, or in medical contexts, to facilitate the insertion of instruments or devices.

Fax Machine

An electronic device used to send and receive documents over a telephone line by converting them into electronic signals.