In a closed economy, if households expect future income to be lower than expected and firms expect future productivity to be lower, then the real interest rate and equilibrium saving а. falls; falls b. falls; rises C. rises; falls d. rises; rises е. none of the other options

In a closed economy, if households expect future income to be lower than expected and firms expect future productivity to be lower, then the real interest rate and equilibrium saving а. falls; falls b. falls; rises C. rises; falls d. rises; rises е. none of the other options

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

In a closed economy, if households
expect future income to be lower than
expected and firms expect future
productivity to be lower, then the real
interest rate
and
equilibrium saving
а.
falls; falls
b.
falls; rises
С.
rises; falls
d.
rises; rises
е.
none of the other options

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