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Problem 3 Household optimality condition: Suppose that an agent has only current income y and is expecting to live just one additional period in Which

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Problem 3 Household optimality condition: Suppose that an agent has only current income y and is expecting to live just one additional period in Which she retires and earns no income. Her preferences are given by U(CO, cl) : ln(co) + r81n(cl) There are no taxes and the interest rate is 7' (a) Derive the lifetime budget constraint. (b) Derive optimal choice of cO and cl

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