In Irving Fisher's Two-Period Model, If the Consumer Is Initially

question 47

Multiple Choice

In Irving Fisher's two-period model, if the consumer is initially saving in period one and the real interest rate rises, then:

• A) both the income and substitution effects will make the consumer want to consume less in period one.
• B) both the income and substitution effects will make the consumer want to consume more in period one.
• C) the substitution effect will make the consumer want to consume less in period one but the income effect will make him or her want to consume more.
• D) the income effect will make the consumer want to consume less in period one, but the substitution effect will make him or her want to consume more.

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Definitions:

Survivor Benefits

Benefits, often financial, provided to the dependents of a deceased individual, typically through insurance or social security systems.

Chronic Disability

A long-term physical or mental impairment that substantially limits one or more major life activities.

Disability Claims

Disability claims refer to formal requests made by individuals to insurance companies or government agencies for benefits or compensation due to a disability that prevents them from working.

Primary Prevention

Measures taken to prevent the onset of disease or injury before they occur, aiming at reducing risk factors.