Question: Suppose an individual's two period utility function and budget constraint are given by the follow- cl-o-l cl- - (Utility fm) (Budget constraint) where Cl

Suppose an individual's two period utility function and budget constraint are given by the follow- cl-o-l cl-" - (Utility fm) (Budget constraint) where Cl and denote period I and period 2 consumption, '3 represents the discount factor, r is the net real interest rate, and measures the degree of risk aversion. As in class, Y and T denote income and lump sum taxes.

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