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The Ray That Connects the Maximum One Can Consume in Year

Question 4

Multiple Choice

The ray that connects the maximum one can consume in Year 0 with the maximum one can consume in Year 1 represents:


A) all the investment possibilities and has a slope equal to (1 + r) .
B) all best consumption alternatives and has a slope equal to -(1 + r) .
C) all the savings choices and has a slope equal to 1.
D) all the best consumption choices and has a slope equal to 1.

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