Consider a consumer facing the inter-temporal consumption problem studied inclass in which there are two periods The consumer earns mi in period 1 and m2in period 2 The consumer has well-behaved prefe

The correct statement is: None of the above.

Following an increase in the interest rate, it is possible for the consumer to be made better off, to remain a borrower, or to become a lender. The outcome depends on the specific preferences and income of the consumer.