Household maximum spending


In the two-period model, suppose a household's income in the first period is $40,000, income in the second period is $50,000, and the real interest rate is 25 percent. By how much would the household's maximum spending in the first period increase if income in the second period increased to 60,000?

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Accounting Basics: Household maximum spending
Reference No:- TGS065445

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