In Class we considered the case in which the consumer can borrow and lend freely and the interest rate r. We also considered the case in which the individual can save at rate r but cannot borrow at all. Consider now the intermediate case of Silly Valley Bank, a poorly managed bank in which the interest rate charged for borrowing is smaller than the interest rate paid by the bank to the consumer for the money they deposit in the bank. In other words, the consumer can SAVE at the rate rs (s for saving) and can BORROW at rate rb (b for borrowing) with rs > rb . The individual receives y1 and y2 in periods 1 and 2 respectively