The intertemporal substitution effect refers to substitution of
A) goods for services.
B) goods and services for less expensive goods and services.
C) goods and services today for goods and services in the future.
D) goods and services produced domestically for goods and services produced in another country.

Question

Quizplus · Accepted Answer

The intertemporal substitution effect refers to the decision to substitute consumption of goods and services today for consumption in the future, often in response to changes in interest rates or income expectations.

The Intertemporal Substitution Effect Refers to Substitution of