Answer 1.5-1.7 is needed.

1 Consumption, classical and Keynesian . . Consider The Consumption Theory we discussed in class when there are MANY periods (say, a person who is going to live for 70 years). Imagine that this person does not care about his or her children. This is what we called the Life Cycle Hypothesis. (1) How many bonds will this person leave when he dies? (ii) What is his lifetime Intertemporal budget constraint? (iii) What is the marginal propensity to consumer out of temporary income? What does it depend on? (iv) What is the marginal propensity to consume out of permanent income? Does it depend on the same factors you mentioned in the previous question? Imagine that this person actually cares for his or her children in the sense that his utility function includes the utility of his children. (v) How many bonds will this person leave when he dies? Is your answer different from (1)? If so, why? (vi) What is the marginal propensity to consume out of temporary income? Is it the same as in (ii)?. If it is not, explain why. (vii) What is the marginal propensity to consume out of permanent income? Is it the same as in (ii)?. If it is not, explain why. ) How many bonds this paron lee when he dies! An act yt a) what is his time in temporal bekyet.consin? Assume To Assumptions : Bo Bono. Poson oes not recice or leave bonds for figure generations. Preneval Bowtion: BOCI+)+ SOM CY0+)n-1) Bn/City-) + SUM con (i+)-1) "This case: Cyn/C+Y) . Ecn16+)-1) or Lifetime Income = lifetime consumption approaches Infinity Ilarge number of perfods / 17e line. Hernati -vely conftten Ny=TC NGT,T IS lifetime yeans (70), and N is fncome - gencanting prod. Therlore centy chot in the marginal propensity to come art of tempowy Pame? whot dus n. depend on Mpe. Aclay - N/7).so marginal Dopendly to concome out of anticated temperny freone is and by number of Pood that he must mooth consumptric CT denominato in this can T-10, number of years woked). This will be less than in this code Oc MPC et, then MR to depend on age and expectation of how mong period of the are left Cgfven in this problem). I what is the marginal propensity to consume out of Permanent Income? Does it depend on the same Pactor you mentioned in the previous Questions y Ana Mpe of percent income is opsockey 4. I. This does not depend on age or expectertion of when you die, bent on the still continuity of thely estimated fixture Income Imagine that this person actually come fos til es her children in sange that alty francton Peluky of his chlichen the utility