23. When an individual is considering borrowing to smooth consumption they will borrow just enough that the interest rate is less than their discount rate. A. B. C. D. ABCD they can consume equal amounts now and later. they can easily pay back the loan. the discount rate is equal to the interest rate.
23. When an individual is considering borrowing to smooth consumption they will borrow just enough that the interest rate is less than their discount rate. A. B. C. D. ABCD they can consume equal amounts now and later. they can easily pay back the loan. the discount rate is equal to the interest rate.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter22: Inflation
Section: Chapter Questions
Problem 4SCQ: Edna is living in a retirement home where home where most of her needs are taken care of, but she...
Related questions
Question
![23.
When an individual is considering borrowing to smooth consumption they will borrow just
enough that
the interest rate is less than their discount rate.
A.
B.
C.
D.
ABCD
they can consume equal amounts now and later.
they can easily pay back the loan.
the discount rate is equal to the interest rate.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe36ce084-d9d2-45e4-8164-13e5102b88b8%2F595ef415-ba69-4b01-bb77-02f8e725785d%2Fqstxs1d_processed.jpeg&w=3840&q=75)
Transcribed Image Text:23.
When an individual is considering borrowing to smooth consumption they will borrow just
enough that
the interest rate is less than their discount rate.
A.
B.
C.
D.
ABCD
they can consume equal amounts now and later.
they can easily pay back the loan.
the discount rate is equal to the interest rate.
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