When the real interest rate rises, there is
A) neither a shift of the consumption function nor a movement along the consumption function.
B) a downward shift of the consumption function.
C) a downward movement along the consumption function.
D) an upward shift of the consumption function.
E) an upward movement along the consumption function.
B
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Suppose the demand function for cable TV service is given by QCTV = 15 - 0.25 × PCTV + 0.0005 × M + 0.3 × PSTV, where QCTV is the quantity of cable TV demanded (thousands of households), PCTV is the price of cable TV, M is income and PSTV is the price of satellite TV service. We can see that:
A. cable TV and satellite TV are substitutes. B. cable TV and satellite TV are complements. C. satellite TV is a normal good. D. satellite TV is an inferior good.