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Question: a consumer receives his income in two periods can...

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. A consumer receives his income in two periods, can save or borrow, and views a unit of consumption in period 1 as a perfect substitute (one for one) for a unit of consumption in period 2. If the nominal interest rate is 5% and the inflation rate is 6%, the consumer will: a. Consume only in period 1. b. Consume only in period 2. c. Consume equal amounts in each period. d. Consume more in period 1 than in period 2 if income elasticity exceeds 1. e. Equalize expenditures but not consumption in the two periods.

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