Analyze how fiscal and monetary policies may impact retirement plans. 1. Research how changes in fiscal policy and monetary policy can impact retirement savings. 2. This research should include how changes in policies, including interest rates, tax rates, and policies that impact savings (IRAs, 401k), can impact retirement plans.

Consider an economy that is composed of identical individuals who live for two periods. These individuals have preferences over consumption in periods 1 and 2 given by: U = \T1 + vT2 They receive an income of Y1 = 40 in period 1 and an income of Y2 = 25 in period 2. They can save as much of their income as they like in bank accounts, earning an interest rate of 10% per period. They do not care about their children, so they spend all their money before the end of period 2. Each individual's lifetime budget constraint is given by C1 + C2/(1+ r) = Y1+ Y2/(1 + r). Individuals choose consumption in each period by maximizing lifetime utility subject to this lifetime budget constraint. a. What is the individual's optimal consumption in each period? How much saving does he or she do in the first period?

If the Money Supply increases, what happens in the Market for Loanable funds? Draw the graph. Make sure to label the axes.

In the loanable funds market, if firms become more optimistic about future profitability, then the a demand for loanable funds will increase, interest rates will increase, and private sector investment spending will increase. b demand for loanable funds will decrease, interest rates will decrease, and the equilibrium quantity of borrowing will decrease. c supply of loanable funds will increase, interest rates will decrease, and the equilibrium quantity of borrowing will increase. d supply of loanable funds will increase, interest rates will increase, and private sector investment spending will increase.