In Irving Fisher's Two-Period Model, If the Consumer Is Initially

Multiple Choice

In Irving Fisher's two-period model, if the consumer is initially saving in period one and the real interest rate rises, then:

A) both the income and substitution effects will make the consumer want to consume less in period one.
B) both the income and substitution effects will make the consumer want to consume more in period one.
C) the substitution effect will make the consumer want to consume less in period one but the income effect will make him or her want to consume more.
D) the income effect will make the consumer want to consume less in period one, but the substitution effect will make him or her want to consume more.