Asked on 7 Aug 2018

22) Suppose a household will earn $1 M during its working life (the present) and zero during its retirement years (the future). Suppose the household consumes 0.5M during its working life if the interest rate between the two periods is 100% or if the interest rate is 150%. We can conclude that: A) the household views present consumption as an inferior good B) the household views present consumption as a normal good C) the household views future consumption as an inferior good D) the household views future consumption as a normal good E) nothing about the households tastes for present or future consumption

Answered on 7 Aug 2018

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