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Macroeconomics problem need to solve 2 Problems 1. Consider an exchange economy with two households ( A and B) and a non-storable composite consumption good.

Macroeconomics problem need to solve

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2 Problems 1. Consider an exchange economy with two households ( A and B) and a non-storable composite consumption good. Each agent lives for two periods ( = 0, 1) and there is no uncertainty about their endowment at time 1. The endowment structure is summarized in the following table. household | time 0 | time 1 B 0 2>0 Both households maximize their utility from consumption, which is given by U( ) = logo, + Blog c, where i E {A, B}, B = 1/(1 + p) is the discount factor satisfying 0

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