Microeconomics
Microeconomics
What does having a positive rate of time preference have to do with positive interest rates?
Identify the relation between a positive rate of time preference and a positive interest rate.
Majority of the people greatly prefer the present consumption to the future consumption. For example, majority of the consumers prefer to buy a car today than to purchase a car after 5 years. Therefore, the positive rate of time preference indicates the preference for earlier availability...
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