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d) (10 points) How would your answer to d) above change in Homer was a saver rather than a borrower? e) (18 points total, 9
d) (10 points) How would your answer to d) above change in Homer was a saver rather than a borrower? e) (18 points total, 9 for correct (and completely labeled) diagram and 9 for discussion) Now derive and draw Homer's desired savings function. Describe three reasons why Homer's savings would shift to the right - that is, three reasons why Homer would increase his desired savings at any given real rate of interest. f) (10 points total) Intuition question: What exactly does the slope of the budget constraint represent and why is it (the slope) so important in determining consumption behavior. g) (10 points total) Name 3 reasons why Homer's budget constraint would shift inward (to the left)
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