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Economics
MEDIUM
ENGLISH
Economics
If consumption when young and when old are both normal goods, an increase in the interest rate ?
A
will always increase the quantity of saving
Option A
B
will always decrease the quantity of saving
Option B
will increase the quantity of saving if the substitution effect outweighs the income effect
Correct answer
D
will increase the quantity of saving if the income effect outweighs the substitution effect
Option D
Correct answer: C
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