Problem
1. How do changes in the real interest rate affect the IBL and current and future consumption?
2. How do binding borrowing constraints affect the IBL and current and future consumption?
3. On what assumptions did Keynes base his theory of consumption? How does his theory relate to intertemporal choice?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.