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2) Consider Calvin. He thinks of the world as consisting of today and his destiny. Calvin has income of Yr today and is destined to

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2) Consider Calvin. He thinks of the world as consisting of today and his destiny. Calvin has income of Yr today and is destined to get income of Ya. Because his friend Hobbes requires more tuna, Calvin's desired consumption today (Cf) exceeds the income he receives today. Unfortunately for Calvin, he cannot borrow today because an acquaintance, Susie, has informed everyone that Calvin is a bad credit risk. Ref: M 480-487, Notes 2-2 a) Use a diagram to show both Calvin's consumption today and his destined consumption. b) Now assume that Mrs Wormwood is the Minister of Finance and introduces a compul- sory savings scheme. Use your diagram from a) to show how this policy affects the welfare of Calvin. Is he better or worse off

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