Consider the following consumption function which accurately describes aggregate behavior of consumption: C = \bar{C} + c (Y - T)+ \epsilon_{c} There are other factors which affect consumption in our model captured through \epsilon_{c}. Now assume that the Reserve Bank of Australia announces a rise in the interest rates. This causes Question 16Answer a. a reduction of the reward to savings. b. consumers to spend more and save less c. a reduction of the cost of borrowing. d. a reduction in consumer purchases of durable goods