Consider a 2-period model that explains the intertemporal choice of a con- sumer. 1. (20%) Explain...

 

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Consider a 2-period model that explains the intertemporal choice of a con- sumer. 1. (20%) Explain optimal consumptions of a consumer who is a borrower. 2. (30%) Explain the consumer's intertemporal consumption choices if real interest rate decrease. Use graphical analysis. Consider a 2-period model that explains the intertemporal choice of a con- sumer. 1. (20%) Explain optimal consumptions of a consumer who is a borrower. 2. (30%) Explain the consumer's intertemporal consumption choices if real interest rate decrease. Use graphical analysis.