In the intertemporal choice model (C0 and C1 ) an individual is endowed with only future goods and no current goods. A drop in the real interest rate would cause the budget line to ______and move______. a. steepen, downward b. steepen, upward c. flatten, downward d. flatten, upward e. keep a constant slope, upward Note : I know the correct answer is D) but PLEASE DRAW A PICTURE TO HELP EXPLAIN THE ANSWER TO THIS QUESTION!!!!
In the intertemporal choice model (C0 and C1 ) an individual is endowed with only future goods and no current goods. A drop in the real interest rate would cause the budget line to ______and move______. a. steepen, downward b. steepen, upward c. flatten, downward d. flatten, upward e. keep a constant slope, upward Note : I know the correct answer is D) but PLEASE DRAW A PICTURE TO HELP EXPLAIN THE ANSWER TO THIS QUESTION!!!!
Economics Today and Tomorrow, Student Edition
1st Edition
ISBN:9780078747663
Author:McGraw-Hill
Publisher:McGraw-Hill
Chapter1: What Is Economics
Section1.3: What Do Economists Do?
Problem 5R
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In the intertemporal choice model (C0 and C1 ) an individual is endowed with only future goods and no current goods. A drop in the real interest rate would cause the budget line to ______and move______.
a. steepen, downward
b. steepen, upward
c. flatten, downward
d. flatten, upward
e. keep a constant slope, upward
Note : I know the correct answer is D) but PLEASE DRAW A PICTURE TO HELP EXPLAIN THE ANSWER TO THIS QUESTION!!!!
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