Will Wisp will live for exactly two periods.His utility function is U(c₁, c₂)= c₁c₂, where c₁ is consumption in period 1 and c₂ is consumption in period 2.He will have no income in period 2.His income in period 1 is $40,000.If the interest rate rises from 10 to 14%: A)his savings will increase by 4% and his consumption in period 2 will increase. B)his consumption in both periods will increase. C)his consumption in both periods will decrease. D)his savings will not change but his consumption in period 2 will increase by $800. E)his consumption in period 1 will decrease by 14% and his consumption in period 2 will increase.

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The Answer of Will Wisp will live for exactly two periods.His utility function is U(c₁, c₂)= c₁c₂, where c₁ is consumption in period 1 and c₂ is consumption in period 2.He will have no income in period 2.His income in period 1 is $40,000.If the interest rate rises from 10 to 14%: A)his savings will increase by 4% and his consumption in period 2 will increase. B)his consumption in both periods will increase. C)his consumption in both periods will decrease. D)his savings will not change but his consumption in period 2 will increase by $800. E)his consumption in period 1 will decrease by 14% and his consumption in period 2 will increase.

Will Wisp Will Live for Exactly Two Periods