Multiple choice question and give a short explanation about your answer: According to the Fisher model does a change in the interest rate changes a consumer’s behaviour if he/she is a borrower? a. a consumer keeps consumption equal in both periods trying to smooth it. b. second-period consumption might rise or fall depending on income or substitution effect variations. c. a consumer increases consumption in the first period. d. no effect at all.

Multiple choice question and give a short explanation about your answer: According to the Fisher model does a change in the interest rate changes a consumer’s behaviour if he/she is a borrower? a. a consumer keeps consumption equal in both periods trying to smooth it. b. second-period consumption might rise or fall depending on income or substitution effect variations. c. a consumer increases consumption in the first period. d. no effect at all.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter9: Aggregate Expenditures

Section: Chapter Questions

Problem 5E

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