Question: 2. Representative Household Problem. The representative household's objective is to max- imize lifetime utility subject to its intertemporal budget constraint. The household gets utility from
2. Representative Household Problem. The representative household's objective is to max- imize lifetime utility subject to its intertemporal budget constraint. The household gets utility from consumption and leisure A3 1 max Ce,C NE,N E+1 1,E-1 subject to t+1 D w t+1 t+1. +1 Ct wit Nt Dt 1 rt i rt (a) Solve for Ci 1 in terms of the other variables in the intertemporal budget constraint. Plug this in the objective function (i.e., lifetime utility). Re-write the household problem as an unconstrained maximization problem where the household is choosing Ct, Nt, and Nt+1
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