Part I. Let a = .30 in our usual lifetime utility function and suppose that t...

 

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Part I. Let a = .30 in our usual lifetime utility function and suppose that t 1 2 3 W₁ r₁ 20 .04 30 .05 40 .01 Using our overlapping generations model, in which households choose their lifetime consumption path so as to maximize the utility that they will receive, answer the following questions. In each case, provide both an expression in symbols and a numerical answer. N, the number of young households born in each period is not specified because I expect you to answer each question on a "per household" basis. 1. How much do the young earn in periods 1,2, and 3? 2. How much do the young consume in periods 1,2, and 3? 3. How much do the young save in periods 1,2, and 3? Part I. Let a = .30 in our usual lifetime utility function and suppose that t 1 2 3 W₁ r₁ 20 .04 30 .05 40 .01 Using our overlapping generations model, in which households choose their lifetime consumption path so as to maximize the utility that they will receive, answer the following questions. In each case, provide both an expression in symbols and a numerical answer. N, the number of young households born in each period is not specified because I expect you to answer each question on a "per household" basis. 1. How much do the young earn in periods 1,2, and 3? 2. How much do the young consume in periods 1,2, and 3? 3. How much do the young save in periods 1,2, and 3?

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