Draw intertemporal budget line, Econometrics

Over the next two years, Susan's income will be $33,000 in the first year and $33,000 in the second year. She can both borrow and lend money at the 10% of annual interest.

(a) What are the present and future (next year's) value of her 2-year income?

(b) Draw Susan's intertemporal budget line for the 2-year period.

(c) If the interest rate decreases, how will this affect the present value of Susan's two-year income? Explain and illustrate in the above graph.

Posted Date: 4/1/2013 3:49:52 AM | Location : United States







Related Discussions:- Draw intertemporal budget line, Assignment Help, Ask Question on Draw intertemporal budget line, Get Answer, Expert's Help, Draw intertemporal budget line Discussions

Write discussion on Draw intertemporal budget line
Your posts are moderated
Related Questions
(a) What is a white noise process? (b) Distinguish between exogenous and endogenous variables, using examples. (c) What do you understand by simultaneity bias and can OLS

Which of the following is an example of derived demand?

Suppose that the aggregate demand curve in a particular year is given by the algebraic           expression:  Y = 3000 + 1000/P, where Y is the aggregate output and P is t

remedial measure of multicolinearity


Question 1: a)  Explain what is a VAR giving an example both in the form of an equation and matrix. Discuss its benefits and limitations. b)  How can we estimate a VAR invol

demand analysis of fast food among civil servant

My econometrics assignment is due for monday, August 18th. I''m running out of time and need a help to meet the deadline. I need answers for 4 problems from the basic econometrics.

David has  £5000  that  he wishes  to  save  for  six  years. Bank A  offers  him  an interest  rate  of  4%  per  annum  compounded  monthly.  Bank  B  offers  him  an interest ra

You are considering a new line of consumer products. You expect revenues of $14 million in each of the next ten years, while expenses are half of revenues (all cash flows are assum