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What would be the impact on savings

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1. In practice, the m.p.c. out of current income is very high-is this necessarily inconsis- tent with the forward-looking model?

2. What would be the impact on savings if the government introduced an unemployment insurance scheme?

3. In the two-period model the consumer aimed to die with zero assets. What would be the planning horizon of parents who wished their children to enjoy the same standard of living they experienced? What is the planning horizon if every generation feels this way?

Reference no: EM13887939

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