Given the following data: U= C 1 * C 2 ; p 1 = 10; m 1
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Question:
Given the following data: U= C1 * C2; p1 = 10; m1 (wealth at 1st period) = 100; m2 (wealth at 2nd period) = 120; r (interest rate) = 0.2; and (inflation rate) = 0.2, so quantities demanded of both goods are: (just one alternative is correct)
a) C1 = 10; C2= 10 b) C1 = 15; C2= 8 c) C1 = 12.3; C2= 7.40 d) C1 = 8.7; C2= 11.3 Please details of calculations. Thanks :D
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