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b) Suppose that the average rate of time preference among economic units increases (i.e. increased preference for future consumption). Use the Fisher model to ILLUSTRATE(2charts
b) Suppose that the average rate of time preference among economic units increases (i.e. increased preference for future consumption). Use the Fisher model to ILLUSTRATE(2charts to show change) how this change would affect the investment/production/consumption decision made by an economic unit who is already operating as a DSU.
c) What would happen to the amount of desired borrowing?
the illustration is the most important.
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