Assume that Clem is an individual who has current income of $26 898 and expected future income of $59.968 They have only $6.295 in current wealth and expect $21,031 in future wealtth If Clem decides he wants to consume twice as much in period two than in period one and faces a real interest rate of 3.4% for both borrowing and saving, answer the following questions 1. What is the optimal level of consumplion in perlod one? Round to 2 decimal places. Do not add in the doltar sign. Be sure to add a negative sign if needed. 2 What is the optimal level of consumplion in perlod twa? Round to 2 decimal places. Do not add in the dollar sign. Be sure to add a negative sign if needed.
Assume that Clem is an individual who has current income of $26 898 and expected future income of $59.968 They have only $6.295 in current wealth and expect $21,031 in future wealtth If Clem decides he wants to consume twice as much in period two than in period one and faces a real interest rate of 3.4% for both borrowing and saving, answer the following questions 1. What is the optimal level of consumplion in perlod one? Round to 2 decimal places. Do not add in the doltar sign. Be sure to add a negative sign if needed. 2 What is the optimal level of consumplion in perlod twa? Round to 2 decimal places. Do not add in the dollar sign. Be sure to add a negative sign if needed.
Chapter17: Capital And Time
Section: Chapter Questions
Problem 17.2P
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