What will happen to the interest rate in that nation

Reference no: EM131481400

Question: Assume that the residents of a nation become more patient (experience a reduction in their time preferences).

a. What will happen to the interest rate in that nation? What will happen to the equilibrium level of investment in that nation? Explain your answers.

b. In the long run, how will the lower time preferences affect the levels of capital and income growth in that nation?

Reference no: EM131481400

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