The Maxwell School
Syracuse University
Syracuse University
Given:
A household wants to have exactly 2 units of consumption in period 0 for each unit in period 1
The household can borrow or save at an interest rate of 100% (to keep the calculation simple)
The household's income is $100K in period 0 and $100K in period 1.
Determine:
The amount the household borrows or saves in period 0.