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QUESTION
Permanent Income Theory 2: Suppose Juan Martin's current income is 1300 and his future income is 880. Suppose the real interest rate is 10%. His...
- Permanent Income Theory 2: Suppose Juan Martin's current income is 1300 and his future income is 880. Suppose the real interest rate is 10%. His initial assets are 0.
- Compute Juan Martin's PVLR ( this is a simple exercise in EXCEL).
- If Juan Martin wants to have the same level of consumption in the current period and in the future period, e.g., 500 in each period, what would be his consumption? How much does he save or dissave in the current period?
