A consumer views a unit of consumption in period 1 as a perfect substitute (one for one) for a unit of consumption in period 2. If the real interest rate is positive and if p1=p2, the consumer will
consume only in period 1.
consume more in period 1 than in period 2 if income elasticity exceeds 1, otherwise consume more in period 2 than in period 1.
consume only in period 2.
consume equal amounts in each period.
equalize expenditures but not consumption in the two periods.
A consumer views a unit of consumption in period 1 as a perfect substitute (one for one) for a unit of consumption in period 2. If the real interest rate is positive and if p1=p2, the consumer will
consume only in period 1. | ||
consume more in period 1 than in period 2 if income elasticity exceeds 1, otherwise consume more in period 2 than in period 1. | ||
consume only in period 2. | ||
consume equal amounts in each period. | ||
equalize expenditures but not consumption in the two periods. |
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