N1

Continue using the same environment for this question: Sheila lives for two periods. She earns $100 in the first period and $110 in the second period. She wants to consume exactly the same amount in both periods. The interest rate at which she can save and borrow is 10%. There is no inflation.

Which of the following statements is true?

A.

Sheila's lifetime consumption is greater than her lifetime income

B.

Sheila's lifetime consumption is lower than her lifetime income

C.

Sheila's lifetime consumption is equal to her lifetime income