The following question will be about the consumption curve. Remember, the consumption curve plots the level of consumption on the x-axis and the real interest rate on the y-axis.

Which of the following could happen as a result of an increase in the real interest rate?

a) An outward shift of the consumption curve and a decrease in consumption today.

b) A movement along the consumption curve and an increase in consumption today

c) A movement along the consumption curve and a decrease in consumption today

d) A decrease in the slope of the consumption curve and an increase in consumption today

e) None of these