Which of the following statements is correct? a. In a consumers’ utility maximization problems over current and future consumption goods, a higher rate of return r produces substitution and income effects that cause a decrease in quantity demanded of future consumption goods. b. In a consumers’ utility maximization problems over current and future consumption goods, a higher rate of return r produces substitution and income effects that cause an increase in quantity demanded of current consumption goods. c. In a consumers’ utility maximization problems over current and future consumption goods, a higher rate of return r produces substitution effects that favor more saving and income effects that favor less. d. All of the above.
Which of the following statements is correct?
| a. |
In a consumers’ utility maximization problems over current and future consumption goods, a higher |
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| b. |
In a consumers’ utility maximization problems over current and future consumption goods, a higher rate of return r produces substitution and income effects that cause an increase in quantity demanded of current consumption goods. |
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| c. |
In a consumers’ utility maximization problems over current and future consumption goods, a higher rate of return r produces substitution effects that favor more saving and income effects that favor less. |
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| d. |
All of the above. |
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