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Using the two period neoclassical growth model, consider the generic case where β = β (Bar),...

Using the two period neoclassical growth model, consider the generic case where β = β (Bar), and the interest rate is R = R (bar). Now individuals receive wealth in both periods Y and Y ' . If the utility function is logarithmic, then:

i. (5 points) Write the inter temporal budget constraint

ii. (5 points) Write the problem of the agent.

iii. (10 points) Solve the problem of the agent. Now assume that agents CAN NOT SAVE!

iv. (5 points) Write the budget constraint(s).

v. (5 points) Write the problem of the agent.

vi. (10 points) Solve the problem of the agent.

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It's mandatory to solve first four parts

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