Decide whether each of the following statements is true or false. Explain your answer using the income and substitution effects.
i)"If both current and future consumption are normal goods, an increase in the interest rate will necessarily make a saver choose more consumption in the second period."
ii)"If both current and future consumption are normal goods, an increase in the interest rate will necessarily make a saver save more."

Question

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The Answer of Decide whether each of the following statements is true or false. Explain your answer using the income and substitution effects.
i)"If both current and future consumption are normal goods, an increase in the interest rate will necessarily make a saver choose more consumption in the second period."
ii)"If both current and future consumption are normal goods, an increase in the interest rate will necessarily make a saver save more."

Decide Whether Each of the Following Statements Is True or False