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In Irving Fisher's Two-Period Consumption Model, If Y1 = 15,000

Question 105

Multiple Choice

In Irving Fisher's two-period consumption model, if Y1 = 15,000, Y2 = 20,000, the interest rate r is 0.50 (50 percent) , and there is a constraint on borrowing that is binding, then C1 equals:


A) 15,000.
B) 20,000.
C) 28,333.
D) 35,000.

Correct Answer:

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