Two-period model, Macroeconomics

Assignment Help:
Suppose that a household in a two-period model has income of $30,000 in period 1 and $25,000 in period 2, and the interest rate is 75 percent. Assume that the price of the good is $1 in boh periods. Suppose that the household decides to consume 26,000 in period 1 and 32,000 in period 2. Now suppose that the interest rate falls 50 percent, and the household decides not to borrow or lend at all. Is the household better off or worse off with the higher interest rate?

Related Discussions:- Two-period model

Highest willingness to pay, Since anyone is able to obtain a license, not n...

Since anyone is able to obtain a license, not necessarily the low cost suppliers of archery lessons, and it is not necessarily the individuals with the highest willingness to pay w

What do you mean by yield curve, Q. What do you mean by yield curve? Yi...

Q. What do you mean by yield curve? Yield curve is a graph of interest rates of different maturity (recalculated to yearly rates) at a specific point in time. It's common for t

Production possibilities table for consumer goods, To the right is a produc...

To the right is a production possibilities table for consumer goods (automobiles) and capital goods (forklifts): a. Show these data graphically. Upon what specific assumptions is t

Monopoly model, Use the monopoly model to explain how providers are able to...

Use the monopoly model to explain how providers are able to charge different groups of patients different prices.

Introducing the foreign trade sector, Introducing the Foreign Trade Sector ...

Introducing the Foreign Trade Sector  Most economies in the real world are open economies. They engage in trade with other economies. Goods and services are exported and import

Nursing home can experience before it begins to lose money, A nursing home ...

A nursing home contracts with an HMO for skilled nursing care at $2.00 PMPM. If costs are expected to average $120 per day, what is the maximum utilization of days per 1,000 member

GDP, Find the annual (yearly) real and nominal GDP numbers for Turkey from ...

Find the annual (yearly) real and nominal GDP numbers for Turkey from TCMB for the recent past. Use the EVDS system and TUIK data. Describe the source and definition of the data us

Determination of gdp in the cross model, Q. Determination of GDP in the cro...

Q. Determination of GDP in the cross model? In the cross model, GDP is determined as the solution to the equation Y D (Y) = Y We may explain

Gdp, explain the structure of the economy and its impact on the gdp of soun...

explain the structure of the economy and its impact on the gdp of sountry.

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd