Order the answer to: Suppose that the interest rate is 12% and that the

Assignment Help business economics Order the answer to: Suppose that the interest rate is 12% and that the

business economics

Order the answer to: Suppose that the interest rate is 12% and that the

Question Suppose that the interest rate is 12% and that the representative agent’s tastes are such that the interest rate would have to rise to 20% to get him to voluntarily cut current consumption by $1,000. Suppose now that there is a war that destroys $1,000 worth of consumption goods for every agent in the economy. True or False: The interest rate must rise to 20% to restore equilibrium.
Subject business economics
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