Question

How does a change in interest rate affect your decision to spend or save? How would a change in the interest rate affect a firm's decision to invest or save? How might an increase in the wage rate affect what you do with your time? Now describe a tradeoff you’ve made in terms of time or income.

Answer 1

Change is interest rates affects decision as when interest rates are high we tend to save more and borrow less because of costly borrowings and vice versa.

As interest rates increases firms tend to invest more and save less in order to to get more interest.

As wage rate will be increased I would tend to work more and rest less in order to earn more than before in equal or more time.

If wages are on daily basis, And I use to take two days off to celebrate weekend I would take just one day off and work for one more day to get extra wage.