A higher real interest rate ________ saving and ________ consumption spending.

A. increases; decreases
B. does not change; does not change
C. increases; increases
D. decreases; increases


Answer: A

Economics

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The price elasticity of demand for senior citizens purchasing coffee from McDonald's is ?5, while non-senior citizens have a price elasticity of demand equal to ?1.25. If it costs McDonald's $0.02 to produce a coffee, the optimal price for a cup of coffee for senior citizens and the resultant marginal cost under third-degree price discrimination are, respectively:

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