What the maximum possible consumption in period one

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Consider Irving Fisher’s two-period model. If y1 = 20, 000, y2 = 15, 000, the interest rate r equals 0.50 (50 percent),

A) What the maximum possible consumption in period one?

B) What the maximum possible consumption in period two?

c) if there is binding consraint on borrowing, what maximum possible consumbrion in period one?

 

d) if there is a binding consraint on borrowing, what maximum possible consumbrion in period two?

Reference no: EM13983928

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