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There are 2 periods. The consumer must determine how much to spend in each period. Her preferences are given by u(c1,c2)=lnc1+lnc2. The consumer can borrow
There are 2 periods. The consumer must determine how much to spend in each period. Her preferences are given by u(c1,c2)=lnc1+lnc2. The consumer can borrow at interest rate rb and save at interest rate rsrb (a) Write down the budget constraint. (Hint: you will need to handle the cases c1>m1 and c1m1 and c1
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