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Consider Two Time Periods: T and K ct=yt+ykc _ { t } = y _ { t } + y _ { k }

Question 3

Multiple Choice

Consider two time periods: t and k. Which of the following would represent the "future's" budget constraint?


A) ct=yt+ykc _ { t } = y _ { t } + y _ { k }
B) ck=ct+(1+R) ykc _ { k } = c _ { t } + ( 1 + R ) y _ { k }
C) ck=yk(fkft) c _ { k } = y _ { k } - \left( f _ { k } - f _ { t } \right)
D) ct=yt(fkft) c _ { t } = y _ { t } - \left( f _ { k } - f _ { t } \right)
E) ct=yt+(1+R) ftc _ { t } = y _ { t } + ( 1 + R ) f _ { t }

Correct Answer:

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