Two-period consumption problem

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a) Income in period 1 is $50, 000 and income in period 2 is $55, 000 . If the real interest rate is 10%, compute the household’s lifetime income (from the perspective of period 1.)

b) Suppose 2014 consumption was $45 thousand dollars. How much consumption will be available to the median household in 2015?

Reference no: EM131387134

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