Exam - Pennsylvania State University

Yf (expected future income) = 150K. af ( expected future wealth) = 100K ... THE HIGHER THE COST OF PRESENT CONSUMPTION IN TERMS OF FUTURE CONSUMPTION, SUBSTITUTE AWAY FROM CURRENT TO FUTURE CONSUMPTION - IN SUM, SUBSTITUTION EFFECT IMPLIES CONSUME LESS TODAY ... 300 - 276.19 = 23.81. 10 points total (5 points each) for correct and completely ... ................
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