You have $20,000 of current income and $45,000 of future income. The interest rate between the current and future period is 2 percent. When you allocate consumption optimally between the two periods the marginal rate of time preference between the two periods is

Question

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The marginal rate of time preference is equal to the negative of the interest rate when consumption is optimally allocated. Since the interest rate is 2 percent, the marginal rate of time preference is -1.02.

You Have $20,000 of Current Income and $45,000 of Future