BSc II Problem Set II Questions - FACULTY PORTAL
Suppose that permanent income is calculated as the average of income over the past 5 years; that is YP= 1/5(Y + Y-1 + Y-2 + Y-3 + Y-4) (P1) Suppose further that consumption is given by C = .9YP. If you have earned $20,000 per year for the past 10 years, what is your permanent income? YP = … ................
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