Solution to Problems in Chapter 10
Problem 2. YMAX is the maximum possible income of a household if it chooses to hold all of its wealth in interest-bearing corporate bonds:, where W/P is the household’s real wealth, w/P is the real wage rate, and L is the amount of labor supplied during a typical week. The price of a bond, PB, enters the variable YMAX through wealth, W, since ................
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