question archive This question is on consumption and the real interest rate

This question is on consumption and the real interest rate

Subject:EconomicsPrice:2.86 Bought12

This question is on consumption and the real interest rate.

Consider the consumer who lives for two periods and the diagram illustrating the budget line (budget constraint). What happens to the budget line if the real interest rate is decreased?

Select one or more:

a. The budget line pivots clockwise around the point corresponding to the incomes in the two periods

b. The budget line shifts down

c. The budget line pivots counter-clockwise around the point corresponding to the incomes in the two periods

d. The budget line shifts up

 

Option 1

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