Q18. Gudruns lives in a world with two time periods (you can think of this as 'working life' and 'retirement'). Gudrun's income in each period, which she receives at the beginning of each period, is 210 million Icelandic krona. The interest rate, expressed as a fraction, is 0.05 per time period. a) What is the present value of Gudrun's lifetime income? Draw her intertemporal budget constraint. On the same axes, draw Gudrun's intertemporal budget constraint when r = 0.20. b) What if Gudrun thinks that current and future consumption are perfect, one-for-one substitutes for one another. What will her optimal consumption bundle look like? Depict this visually, and explain whether you think this is plausible. c) Now suppose Gudrun views current and future consumption as one-for-one complements. Find her optimal consumption bundle. Do Gudrun's preferences here seem more or less reasonable than in part (b)?