Ct: consumption at period t Yt: income at period t Ct+1: consumption at period t+1 Yt+1: income at period t+1 r: interest rate Choose the budget constraint Select one: a. (1+r) (Y₁-C₁) +Yt+1=Ct+1 b. Yt+Yt+1=Ct+1+Ct c. Yt-Ct=Yt+1-Ct+1 d. Y₁+1=(1+r) Yt+Ct+1-C₁(1+r)

Ct: consumption at period t Yt: income at period t Ct+1: consumption at period t+1 Yt+1: income at period t+1 r: interest rate Choose the budget constraint Select one: a. (1+r) (Y₁-C₁) +Yt+1=Ct+1 b. Yt+Yt+1=Ct+1+Ct c. Yt-Ct=Yt+1-Ct+1 d. Y₁+1=(1+r) Yt+Ct+1-C₁(1+r)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

100%

Ct: consumption at period t
Yt: income at period t
Ct+1: consumption at period t+1
Yt+1: income at period t+1
r: interest rate
Choose the budget constraint
Select one:
a. (1+r) (Y₁-Ct)+Yt+1=Ct+1
b. Yt+Yt+1=Ct+1+Ct
C. Yt-Ct=Yt+1-Ct+1
d. Y₁+1=(1+r) Y₁+Ct+1-C₁(1+r)

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