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Q1) Consider a person In this two period perfect capital market Y the interest rate equals 10% or 0.10. a) Suppose this person's income level
Q1) Consider a person In this two period "perfect capital market "Y" the interest rate equals 10% or 0.10. a) Suppose this person's income level is 3000 TL during time=1 and 2200 TL during time-2. Show that by making the necessary decisions this person can achieve her/his optimal consumption levels. (15 pts) b) Now suppose the income levels are 200 TL at t-1 and 5280 TL 3-2. Show that the optimal consumption levels can still be achieved. (15 pts)
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