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4. Ann has income of $100 this year and $100 next year. The market rate of interest is 10%. (a) Draw Ann's intertemporal budget constrait.
4. Ann has income of $100 this year and $100 next year. The market rate of interest is 10%. (a) Draw Ann's intertemporal budget constrait. (b) What is the significance of the intercepts and the slope? (c) Assume the market interest rate increases to 20%. Show Ann switching from being a borrower to a saver /lender as a result of the change in interest rate
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