Assume that Clem is an individual who has current income of $26.898 and expected future income of $59 968. They have only $6.295 in current wealth and expect $21,031 in future weaith If Clem decides he wants to consume twice as much in period two than in period one and faces a real interest rate of 3.4% for both borrowing and saving, answer the following questions 1. What is the optimal level of consumption in perlod one? Round to 2 decimal places. Do not add in the dollar sign. Be sure to add a negative sign il needed. 2. What is the optimal level of consumplion in perlod two? Round to 2 decimal places. Do not add in the dollar sign. Be sure to add a negative sign if needed.

Assume that Clem is an individual who has current income of $26.898 and expected future income of $59 968. They have only $6.295 in current wealth and expect $21,031 in future weaith If Clem decides he wants to consume twice as much in period two than in period one and faces a real interest rate of 3.4% for both borrowing and saving, answer the following questions 1. What is the optimal level of consumption in perlod one? Round to 2 decimal places. Do not add in the dollar sign. Be sure to add a negative sign il needed. 2. What is the optimal level of consumplion in perlod two? Round to 2 decimal places. Do not add in the dollar sign. Be sure to add a negative sign if needed.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter17: Capital And Time

Section: Chapter Questions

Problem 17.2P

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