Use the model for a household's inter temporal trade-off between consumption today and consumption tomorrow, to answer the following questions a)a) What does it mean being off the budget constraint?

b) What does it mean being off an indifference curve?

c) How can you explain what happens to a person that are facing lower interest rate on a loan?

d) How will the consequences of a financial crisis differ depending on whether we assume it is temporary compared to permanent?