In the Fisher Two-Period Model, If the Consumer Is a Saver

question 67

Multiple Choice

In the Fisher two-period model, if the consumer is a saver, consumption in periods one and two are normal goods, and the income effect of an increase in interest rate is less than the substitution effect, then saving:

• A) will increase.
• B) will decrease.
• C) will not change.
• D) may either increase or decrease.

---

Definitions:

Generation Z

The demographic cohort following Millennials, typically defined as individuals born from the mid-1990s to the early 2010s, characterized by its comfort with digital technologies and social media.

Exchange Rate

The value of one currency for the purpose of conversion to another.

Country's Currency

The legal tender issued by a country's government, used as a medium of exchange within its economy.

Consumer Protection Agency

Government or independent organizations tasked with protecting the rights of consumers through the enforcement of laws and regulations that prevent fraud, unfair practices, and misinformation.