Economics · Consumption Function
Which of the following is likely to have a negative effect on aggregate real consumption, assuming the substitution effect dominates?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1An increase in expected inflation
- 2A temporary increase in labour income
- 3An increase in real interest rates✓
- 4A permanent increase in labour income
Correct answer
An increase in real interest rates
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