# Question: Suppose that a person lives for two periods earning 30 000

Suppose that a person lives for two periods, earning $30,000 in income in period 1, which she consumes or saves for period 2. What is saved earns interest of 10% per year.

a. Draw that person’s intertemporal budget constraint.

b. Draw that persons’s intertemporal budget constraint if the government taxes interest at the rate of 30%.

a. Draw that person’s intertemporal budget constraint.

b. Draw that persons’s intertemporal budget constraint if the government taxes interest at the rate of 30%.

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