Question: Please help ASAP. I've been stuck on this question for 5 days! Suppose the interest rate rises so that microcredit program participants must make payments
Please help ASAP. I've been stuck on this question for 5 days!
Suppose the interest rate rises so that microcredit program participants must make payments of 35 rather than 30 in periods 1 and 2. Now who participates and which projects do they undertake?
| Project Description | Setup cost | Profits delivered by business in each of three periods | |||
| Period 1 | Period 2 | Period 3 | |||
| Purchase inventory for small retail operation | Low skill | 50 | 25 | 25 | 0 |
| High skill | 50 | 40 | 40 | 0 | |
| Purchase sewing machine for tailoring business | Low skill | 70 | 0 | 0 | 0 |
| High skill | 70 | 0 | 60 | 60 | |
| Impact on average consumption for: | Participate (yes or no) | Period 1 | Period 2 | Period 3 |
| Group 1 | 0 | 0 | 0 | |
| Group 2 | 10 | 10 | 0 | |
| Group 3 | -50 | 30 | 60 | |
| Microcredit program Participants | -10 | 16.6 | 20 | |
| Percent of microcredit program participants whose consumption is raised by at least 15 in the given period | 0 | 33 | 33 |
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