ssume a set of well-behaved (i.e. strictly monotone and strictly convex) intertemporal indifference curves between period 1 and 2. Then suppose that the nominal interest rate r decreases. Explain what happens to the new interior solution if current and future consumption are normal and inferior goods, respectively

ssume a set of well-behaved (i.e. strictly monotone and strictly convex) intertemporal indifference curves between period 1 and 2. Then suppose that the nominal interest rate r decreases. Explain what happens to the new interior solution if current and future consumption are normal and inferior goods, respectively

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter17: Capital And Time

Section: Chapter Questions

Problem 17.1P

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