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In the construction of the IS curve, what are the precise effects of a fall in the real interest rate (r) on consumption and savings? note: the theory of permanent income must be mentioned

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter23: The Aggregate Expenditure Model

Section: Chapter Questions

Problem 1P

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Question

In the construction of the IS
curve, what are the precise
effects of a fall in the real interest
rate (r) on consumption and
savings?
note: the theory of permanent
income must be mentioned

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