Question: Assume that the instantaneous utility function u(C ) in equation (2.2) is ln C. Consider the problem of a household maximizing (2.2) subject to (2.7).

Assume that the instantaneous utility function u(C ) in equation (2.2) is ln C. Consider the problem of a household maximizing (2.2) subject to (2.7). Find an expression for C at each time as a function of initial wealth plus the present value of labor income, the path of r(t), and the parameters of the utility function.

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