contestada

A rise in the interest rate increases the opportunity cost of consuming today. increases the opportunity cost of consuming in the future. decreases the opportunity cost of consuming today. decreases the opportunity cost of consuming in the future.

Respuesta :

Answer:

increases the opportunity cost of consuming today

Explanation:

Consumption today is inversely related to interest rate.

If interest rate rises, consumption falls and if interest rate falls, consumption increases.

If interest rate is higher, the amount that can be earned on savings increases and this increases the incentives to save more now and consume less today.

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