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In Irving Fisher's Two-Period Model, the Income Effect of an Increase

Question 83

Multiple Choice

In Irving Fisher's two-period model, the income effect of an increase in the interest rate in the first period for a saver is the:


A) decrease in the relative price of second-period consumption.
B) additional income earned on first-period saving.
C) decrease in the relative price of first-period consumption.
D) additional income earned on second-period saving.

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