Which of the following statements is true?

Question

Quizplus · Accepted Answer

An economic agent lends to earn a return, as the lender will receive interest payments on the loan. This would increase their current income, but not their current spending. Therefore, option D is the true statement. Option A is incorrect because when an individual lends money, their current spending would not increase, as they have given away their money. Option B is incorrect as borrowing money would increase an individual's current spending, as they can now spend more than they have. Option C is incorrect as lending money would move an individual's spending from the present to the future, not the other way around.

Which of the Following Statements Is True