When considering household saving,what is the relative price between "consuming when young" and "consuming when old"
A)the consumption rate
B)the interest rate
C)the prime rate
D)the bank rate

Question

Quizplus · Accepted Answer

The relative price between "consuming when young" and "consuming when old" is determined by the interest rate. This is because household savings can be invested in financial instruments that earn interest over time, which can increase the purchasing power of those savings in the future. Therefore, the higher the interest rate, the more advantageous it is to save and consume later.

When Considering Household Saving,what Is the Relative Price Between "Consuming