Lisa has no outstanding debt and she currently works 1 500, Ask an Expert

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Lisa has no outstanding debt and she currently works 1, 500 hours a year at $20 per hour. The current real rate of interest is 2% and she consumes 95% of her income and saves the remainder. If Lisa's substation effect of the real interest rate on savings is zero, an increase in the real interest rate from 2% to 5% will lead to an increase in consumption today of $42.86.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92414561

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