Fred has income of

$100,000

this year and

$120,000

next year. Fred can borrow at an interest rate of

8%

or lend at an interest rate of

2%

. Draw Fred's budget constraint between spending this year and spending next year labeling all significant points.

Fred has income of $100,000 this year and $120,000 next year. Fred can borrow at an interest rate of 8% or lend at an interest rate of 2%. Draw Fred's budget constraint between spending this year and spending next year labeling all significant points