When real interest rates rise, consumption will shift: downward if income rises as well downward if there is saving O upward if the substitution effect outweighs the income effect O upward if the income effect outweighs the substitution effect

When real interest rates rise, consumption will shift: downward if income rises as well downward if there is saving O upward if the substitution effect outweighs the income effect O upward if the income effect outweighs the substitution effect

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

When real interest rates rise, consumption will shift:
downward if income rises as well
downward if there is saving
O upward if the substitution effect outweighs the income effect
O upward if t
income effect outweighs the substitution effect

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