Analyze the effect of an interest rate on a consumer

Reference no: EM131789541

Question: 1. Analyze the effect of an interest rate decrease on a consumer who is currently a lender. Specifically, answer the following questions. A graph would be useful in your analysis.

a. What happens to consumption today and in the future?

b. Is the consumer better or worse off?

c. What happens to savings?

d. Will the consumer remain a lender?

Reference no: EM131789541

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