Suppose utility = In(C) + In(C), where C = (C) (C) for t = 1,2. Suppose...

 

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Suppose utility = In(C) + In(C), where C = (C) (C) for t = 1,2. Suppose there is no initial wealth (B = 0) and the real interest rate is 1 = 0. = 25, Q = 15, Q = 20. Suppose endowments are Q = 25, Q = 1.5. Suppose that P = P = 1; PN = 2, P Solve for equilibrium consumption of traded and non-traded goods in each period. What are the trade balances in each period? Suppose utility = In(C) + In(C), where C = (C) (C) for t = 1,2. Suppose there is no initial wealth (B = 0) and the real interest rate is 1 = 0. = 25, Q = 15, Q = 20. Suppose endowments are Q = 25, Q = 1.5. Suppose that P = P = 1; PN = 2, P Solve for equilibrium consumption of traded and non-traded goods in each period. What are the trade balances in each period?

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To solve for the equilibrium consumption of traded and nontraded goods in each period and calculate ... View the full answer