5. If current and future consumption are both normal goods, a decrease in the interest rate will necessarily А. cause savers to save more. В. cause borrowers to borrow less. С. reduce everyone's current consumption. D. make everyone worse off. E. None of the above. 6. If the price level increases by 70% in one year, then for the nominal rate of interest to be 10%, the real rate of interest would have to be А. -35%. В. 35%. С. 80%. D. -60%. Е. 60%.

5. If current and future consumption are both normal goods, a decrease in the interest rate will necessarily А. cause savers to save more. В. cause borrowers to borrow less. С. reduce everyone's current consumption. D. make everyone worse off. E. None of the above. 6. If the price level increases by 70% in one year, then for the nominal rate of interest to be 10%, the real rate of interest would have to be А. -35%. В. 35%. С. 80%. D. -60%. Е. 60%.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: Savings,investment And The Financial System

Section: Chapter Questions

Problem 5PA

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