Two-period model, Suppose that a household in a two-period model has income of $30,000, Macroeconomics

Two-period model, Macroeconomics

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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?

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Two-period model, Macroeconomics

Related Discussions:- Two-period model

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

National income, # ???? .. difference between gdp at market price and nnp...

IS-lm model, Derive the following equilibrium for the IS-LM model:

Theory of demand and supply, what is the difference between demand and supp...

List of major emerging-market economies, List of major emerging-market econ...

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Write Your Message!

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