Consider a two-period endowment economy with a single representative agent. That agent's utility function is: U=In(ct) + (1/2)In(Ct+1) In this endowment economy, output is 100 in period t and 150 in period t+1. What is the equilibrium interest rate (r) in this economy? Write your answer as a percentage, but omit the percent sign. So if you think r=0.1, that's 10%, but write 10. Similarly, if you think r= 1.5. that's 150%. but write 150.

Consider a two-period endowment economy with a single representative agent. That agent's utility function is: U=In(ct) + (1/2)In(Ct+1) In this endowment economy, output is 100 in period t and 150 in period t+1. What is the equilibrium interest rate (r) in this economy? Write your answer as a percentage, but omit the percent sign. So if you think r=0.1, that's 10%, but write 10. Similarly, if you think r= 1.5. that's 150%. but write 150.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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