Effects on the savings inter-temporal budget constranit

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Reference no: EM131107586

Graph the effects on the savings inter-temporal budget constranit. You are required to use the graphical representation of the llifecycle model's inter-temporal budget constraint.

Assume a progressive tax system with 2 tax brackets are applicable for the individual. Assume deductibility of interest rates on borrowed money and taxing interest earnings. You must fully label your graph to include intercepts, the value of the slope( use t1 and t2 for two tax rates)over all ares of the inter-temporal budget constraint, and the endowment point.

The y-axis is Future consumption, the x-axis is current consumption.

Reference no: EM131107586

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