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Q1. Assume which Chenyu expects his income to be $50,000 per year until she retires. In addition, he has accumulated $250,000 in wealth. Calculate his annual level of consumption.
a) Derive Chenyu's consumption function in terms of her annual income Y and initial wealth W according to the life-cycle model.
b) Assume which Chenyu expects his income to be $50,000 per year until she retires. In addition, he has accumulated $250,000 in wealth. Calculate his annual level of consumption.
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Their banks are holding back credit so it is harder for businesses to invest and for consumers to spend
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