If the real interest rate increases,there is
A)a downward shift of the consumption function.
B)a movement upward along the consumption function.
C)a movement downward along consumption function.
D)an upward shift of the consumption function.
E)a change in the slope of the consumption function.

Question

Quizplus · Accepted Answer

An increase in the real interest rate makes saving more attractive, leading to a decrease in consumption.

If the Real Interest Rate Increases,there Is