Question
Question 82 pts Scenario 1 Consider an overlapping generations model with 100 lenders and 121 borrowers born in every period. Everyone lives for only two
Question 82 pts
Scenario 1 Consider an overlapping generations model with 100 lenders and 121 borrowers born in every period. Everyone lives for only two periods. Each lender is endowed with 20 goods when young and nothing when old. Each borrower is endowed with nothing when young and 10 goods when old. Let r be the gross real interest rate on private loans. Also, assume there is no fiat money or capital. Let ci,L be the consumtion in period i=1,2 for lenders and ci,B be the consumption in the period i=1,2 for the borrowers. Also, let l be amount of goods lent and let b the amount of goods borrowed. Refer to Scenario 1. Suppose lenders want to save 10r each and borrowers want to borrow 10/r each. At the market clearing r, what is the total amount lent and borrowed?
Group of answer choices
900
1100
10
1000
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