Question: A higher interest rate and 0 reduces the present value of future income; reduces todav's consumption Ci increases the present value of future income; increases

A higher interest rate and 0 reduces the present value of

A higher interest rate and 0 reduces the present value of future income; reduces todav's consumption Ci increases the present value of future income; increases today's consumption Ci increases the discount rate; increases todav's consumption CI is an incentive to borrow more today; reduces future consumption Ci reduces inflation; consumers spend more today

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