Question: Given the following data: U= C 1 * C 2 ; p 1 = 10; m 1 (wealth at 1st period) = 100; m 2

Given the following data: U= C_{1 *}C₂; p₁= 10; m₁ (wealth at 1st period) = 100; m₂(wealth at 2nd period) = 120; r (interest rate) = 0.2; and (inflation rate) = 0.2, so quantities demanded of both goods are: (just one alternative is correct)

a) C1 = 10; C2= 10 b) C1 = 15; C2= 8 c) C1 = 12.3; C2= 7.40 d) C1 = 8.7; C2= 11.3 Please details of calculations. Thanks :D

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