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    Exam 5: Intertemporal Decision Making and Capital Values
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    If C<sub>0</sub><sub> </Sub>and C<sub>1 </Sub>are Both Normal Goods, for Someone
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If C0 and C1 are Both Normal Goods, for Someone

Question 34

Question 34

Multiple Choice

If C0 and C1 are both normal goods, for someone who borrows in the initial equilibrium, when i
Rises:


A) C0 declines.
B) C0 increases.
C) C0 and C1 both increase.
D) C1 increases.

Correct Answer:

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