If there is a decrease in interest rates, what will happen for households that are net savers in the economy? 

They will decrease current consumption if the substitution effect is greater than the income effect. They will experience no change in current savings if the substitution effect is greater than the income effect. They will increase current savings if the substitution effect is greater than the income effect. They will increase current savings if the income effect is greater than the substitution effect. They will increase current consumption if the income effect is greater than the substitution effect.

Answer rating: 100% (QA)

If there is a decrease in interest rates households that are net savers in the economy are likely to ... View the full answer