Question: Explain why the intertemporal budget constraint pictured in Figure 14.1 can be interpreted as requiring that individuals choose C0 and C1 so that the present

Explain why the intertemporal budget constraint pictured in Figure 14.1 can be interpreted as requiring that individuals choose C0 and C1 so that the present value of this consumption is equal to their current income.
Figure 14.1
The Savings Decision

C1 (1 Y 6.0 Co

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