Ci and Yi are consumption and income at period i (i=1, 2). When the world interest rate is r (100xr%), C2=Answer . A representative agent has the utility function U=C1C2. In an autarky economy, when Y1=100 and Y2=132, the level of the utility is Answer. In an open economy with r=0.1, the level is Answer. When the interest rate rises by 0.1, C2 changes by Answer compared to C2 with r=0.1. C1 changes by Answer compared to C1 with r=0.1. Choose the reason for this change. C1 becomes cheaper. C2 becomes cheaper. Opportunity cost of interest rate becomes smaller.

Ci and Yi are consumption and income at period i (i=1, 2). When the world interest rate is r (100xr%), C2=Answer . A representative agent has the utility function U=C1C2. In an autarky economy, when Y1=100 and Y2=132, the level of the utility is Answer. In an open economy with r=0.1, the level is Answer. When the interest rate rises by 0.1, C2 changes by Answer compared to C2 with r=0.1. C1 changes by Answer compared to C1 with r=0.1. Choose the reason for this change. C1 becomes cheaper. C2 becomes cheaper. Opportunity cost of interest rate becomes smaller.