If consumption when young and when old are both normal goods, an increase in the interest rate ?

A. will always increase the quantity of saving

B. will increase the quantity of saving if the substitution effect outweighs the income effect

C. will always decrease the quantity of saving

D. will increase the quantity of saving if the income effect outweighs the substitution effect

Found an error? Read our corrections policy and report it in the comments below.

Be the first to comment if anything wrong with this mcq
Your comment successfully submitted!
It will automatically posted after review and approval by our staff member.