Multiple Choice
Suppose you receive Y1 of your income this period and Y2 of your income next period. If you can either borrow or lend at an interest rate r, what is the most you can consume in the current period?
A) Y1(1 + r) + Y2
B) Y2(1 + r) + Y1
C) Y1/(1 + r) + Y2
D) Y2/(1 + r) + Y1
Correct Answer:
Verified
Correct Answer:
Verified
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