What will happen to the interest rate in that nation

Reference no: EM131298784

Assume that the residents of a nation become more patient (experience a reduction in their time preferences).

a. What will happen to the interest rate in that nation? What will happen to the equilibrium level of investment in that nation? Explain your answers in a fully labeled graph.

b. Over time, how will the lower time preferences affect the levels of capital and income growth in that nation?

Reference no: EM131298784

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