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The relationship between the rate of interest and level of consumption was first visualized by
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- Amartya K. Sen
- Milton Friedman
- Irving Fisher
- James Duesenberry
- Amartya K. Sen
Correct Option: C
Irving Fisher, in His Theory of Interest (1930), found the relationship between interest rates (nominal interest rate and real interest rate) and the consumption level. Though his theory is about interest rate and inflation, it discusses the effect of real interest rate on savings and gives an inverse relationship between nominal interest rates and consumer expenditures.
