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Determining the consumption bundle

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The real interest rate is 4%. Carl has income y1 = 20, 000 and y2 = 34, 500. Denis has income y1 = 25, 000 and y2 = 29, 000. Carl can afford the consumption bundle where c1 = c2 = 27000. Suppose that the real interest rate is 12% and everything else stays the same. Neither can afford the consumption bundle.

Reference no: EM131104099

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