Question

Suppose your current income is $80,000, and your future income is 110,000. The interest rate= 0.1....


Suppose your current income is $80,000, and your future income is 110,000. The interest rate= 0.1.
1.What is the present value of your life time income?

2.What is the future value of your lifetime income?

3. What is the slope of the intertemporal budget constraint?

4.

If your MRTP at your current consumption is 1.05 then you should:

Select one:

a.

You should save money to spend more in the future

b.

You should borrow money to spend more today

c. Nothing, you are maximizing your utility

d.

You have negative time preference

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