If the interest rate rises, an individual could choose to
A)increase consumption when young.
B)increase consumption when old.
C)decrease consumption when young.
D)Any of the above could be correct.

Question

Quizplus · Accepted Answer

An increase in interest rates makes saving more attractive, so individuals may choose to decrease consumption when young to take advantage of the higher returns on savings.

If the Interest Rate Rises, an Individual Could Choose to