If the substitution effect of the real interest rate on saving is larger than the income effect of the real interest rate on saving, then a rise in the real interest rate leads to a ________ in consumption and a ________ in saving, for someone who's a lender.
a. fall; rise
b. rise; fall
c. rise; rise
d. fall; fall
Answer: A
FIN 201
- Whether real seignorage revenue increases when the rate of money growth increases depends on whether
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