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An individual lives for two periods and then dies. She inherits nothing and leaves no bequests. She earns labour income 1,000 in period 1 and she will earn 1,100 in period 2. Income is received at the beginning of each period and there is no uncertainty. She is able to save at a rate of interest of 10% {0.1} but she cannot borrow against future income. She maximizes a lifetime utility function given by: U = Cfcg'\" where Ci is consumption per period i. Calculate the individual's consumption in period 1 when a = {1.4. Calculate the individual's consumption in period 1 for the case of c = 0.6. Briey discuss your answers and in particular whether or not there are any implications for scal policymakers