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Author Question: If an individual is a debtor, an increase in the interest rate (Read 207 times)

geodog55

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on: Apr 19, 2019

Question 1

Assume that Krystal has positive wealth. As the interest rate increased, Krystal increased her current consumption. For Krystal


◦ the substitution effect of an interest rate increase outweighs the income effect.
◦ the income effect of an interest rate increase outweighs the substitution effect.
◦ the substitution effect of an interest rate increase must be zero.
◦ the income effect of an interest rate increase must equal the substitution effect.

Question 2

If an individual is a debtor, an increase in the interest rate


◦ increases current consumption.
◦ decreases current consumption.
◦ has no effect on current consumption.
◦ will either increase or decrease current consumption depending on the size of the income and substitution effects.
Principles of Economics ¦ Case, Fair, Oster ¦ 12th Edition
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Marked as best answer by geodog55 on Apr 19, 2019

Sophiapenny

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Reply #1 on: Apr 19, 2019
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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geodog55

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Reply #2 on: Apr 19, 2019
Excellent


Sophiapenny

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Reply #3 on: Apr 19, 2019
Great! Please up vote :D


rebeccaeksal

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Reply #4 on: Mar 28, 2022
thank you


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