In a two-period consumption model

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Reference no: EM13833622

In a two-period consumption model, a rise in the income of the second period would cause consumption in the first period to:

A. rise because of the income effect.

B. fall because of the substitution effect.

C. remain constant because the income and substitution effects cancel each other.

D. be undetermined without more information about sizes of the income and substitution effects.

Reference no: EM13833622

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