Use the concepts of income effect and subsitution effect to explain why the effect on desired savings of an increase in the expected real interest rate is potentially ambiguous. Draw the saving curve for when (a) subsitution effect dominates (b) income effect dominates. I need help with the graphs.
Use the concepts of income effect and subsitution effect to explain why the effect on desired savings of an increase in the expected real interest rate is potentially ambiguous. Draw the saving curve for when (a) subsitution effect dominates (b) income effect dominates. I need help with the graphs.
Economics Today and Tomorrow, Student Edition
1st Edition
ISBN:9780078747663
Author:McGraw-Hill
Publisher:McGraw-Hill
Chapter6: Saving And Investing
Section: Chapter Questions
Problem 26AA
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Use the concepts of income effect and subsitution effect to explain why the effect on desired savings of an increase in the expected real interest rate is potentially ambiguous. Draw the saving curve for when (a) subsitution effect dominates (b) income effect dominates.
I need help with the graphs.
Pls solve all for good rating
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