Multiple Choice
The effect of an increase in current consumption that results when a higher real interest rate makes a consumer richer is called
A) the substitution effect of the real interest rate on saving.
B) the income effect of the real interest rate on saving.
C) the net effect of the real interest rate on saving.
D) the substitution effect of the real interest rate on consumption.
Correct Answer:
Verified
Correct Answer:
Verified
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