## Again, consider the special case solved in the text where

Again, consider the special case solved in the text where β = 1 and utility takes the log form. Suppose the real interest rates is 5 percent. Now, we give the consumer a ﬁnancial proﬁle that might look like that of a middle-aged college professor contemplating retirement: initial assets are f0 = \$50,000, and the path for labor income is y0 = \$100,000 and y1 = \$10,000. a) What is the individuals human wealth?

b) According to the neoclassical model, how much does the college professor consume today and in the future? How much does the college professor save today?

c) If current labor income rises by \$20,000, by how much will savings change?

d) By how much does consumption today rise if future labor income rises by \$10,000?

e) If the interest rate rises to 10 percent, by how much do total wealth and today’s consumption change? By how much does savings change? Why are these eﬀects so much smaller than for the student?

f) Would it matter if the professor could not borrow

CLICK ORDER NOW TO GET A CUSTOMIZED PAPER ON THIS TOPIC JUST FOR YOU!! 0%PLAGIARISM 100% ORIGINAL PAPER

### 10 Responses to “Again, consider the special case solved in the text where”

1. Vape juice says:

932822 183516Outstanding weblog here! soon after reading, i decide to buy a sleeping bag ASAP 926311

2. cvv shop says:

966816 531417woah i like yur web site. It truly helped me with the info i wus seeking for. Appcriciate it, will bookmark. 652774

3. 642825 973081Rattling clean internet web site , thanks for this post. 239179

4. DevSecOps says:

417608 240692Hello. Great job. I did not expect this. This really is a superb articles. Thanks! 465024

5. 327664 125482I always was concerned in this topic and stock still am, regards for posting . 48724

6. 125496 254086Its hard to search out knowledgeable individuals on this topic, but you sound like you realize what you are speaking about! Thanks 134369

7. slot online says:

901533 466052I enjoyed reading this a lot I really hope to read a lot more of your posts within the future, so Ive bookmarked your weblog. But I couldnt just bookmark it, oh no.. When I see quality websites like this 1, I like to share it with other people So Ive developed a backlink to your internet site (from 847278

8. Are you ready to enjoy the world?

9. Gayle Haurin says:

CK293-7 CK11755. This is another system of physical protection. 552.

10. 879247 818749Quite nice style and style and fantastic topic matter, really small else we want : D. 51286