In Irving Fisher's two-period model augmented by a borrowing constraint, an example of a consumer for whom the borrowing constraint might likely be binding would be:
A) a college student.
B) a college student's parent.
C) a college professor.
D) the president of a bank.

Question

Quizplus · Accepted Answer

A college student is likely to have limited income and may need to borrow to finance their education or living expenses, making the borrowing constraint binding.

In Irving Fisher's Two-Period Model Augmented by a Borrowing Constraint