Jack obeys two-period Fisher model of consumption. Jack earns Y1 = 400 in the first period and Y2 = 300 in the second period (Y1=400 and Y2=300 we will call his income stream). He can borrow or lend at the real interest rate of 7%. Assume that Jacks optimum path of consumption is described by the following expression:

C₁* = C₂*

1. a) Derive mathematically his inter-temporal budget constraint.