Question

If current and future consumption are both normal goods, an increase in the interest rate will...

If current and future consumption are both normal goods, an increase in the interest rate will necessarily:

1) cause savers to save more

2) cause borrowers to borrow less

3) reduce everyone's current consumption

4) make everyone worse off

5) none of the above

the answer is 2), but I can't understand why 1) can't be an answer. Please explain the answer thoroughly.

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