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Ophelia who has two-period preferences u = c1c2 has a human capital production function R = 40E1/2 and m2 = 0. She maximizes utility when
Ophelia who has two-period preferences u = c1c2 has a human capital production function R = 40E1/2 and m2 = 0. She maximizes utility when she is spending c2 = 120 and c1 = 60. What is the interest rate? Provide a labelled diagram to illustrate and quantify her decisions
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