If C₀and C₁are both normal goods, for someone who borrows in the initial equilibrium, when i Rises: A)C₀declines. B)C₀increases. C)C₀and C₁both increase. D)C₁increases.

Question

Quizplus · Accepted Answer

When interest rates rise, the cost of borrowing increases, leading to a decrease in consumption of normal goods for someone who borrows in the initial equilibrium.

If C0 and C1 are Both Normal Goods, for Someone

If C₀and C₁are Both Normal Goods, for Someone