If consumption when young and when old are both normal goods, an increase in the interest rate ? Options: A . &nbspwill always increase the quantity of saving B . &nbspwill always decrease the quantity of saving C . &nbspwill increase the quantity of saving if the substitution effect outweighs the income effect D . &nbspwill increase the quantity of saving if the income effect outweighs the substitution effect

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

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

Options:

A . will always increase the quantity of saving

B . will always decrease the quantity of saving

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

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

Answer: Option C
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