Use the following to answer questions :
Exhibit: Residential Investment
-(Exhibit: Budget Constraint) Based on the graph, if Y₁ and Y₂ represent income in period one and period two, respectively, r is the interest rate, and the consumer chooses to consume combination A on the budget constraint, what will be the level of consumption in period two, C₂?

Question

Use the following to answer questions :
Exhibit: Residential Investment

-(Exhibit: Budget Constraint) Based on the graph, if Y₁ and Y₂ represent income in period one and period two, respectively, r is the interest rate, and the consumer chooses to consume combination A on the budget constraint, what will be the level of consumption in period two, C₂?

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The Answer of Use the following to answer questions : Exhibit: Residential Investment -(Exhibit: Budget Constraint) Based on the graph, if Y₁ and Y₂ represent income in period one and period two, respectively, r is the interest rate, and the consumer chooses to consume combination A on the budget constraint, what will be the level of consumption in period two, C₂? A) Y₁(1 + r) + Y₂ B) Y₁ + Y₂/(1 + r) C) Y₁/(1 + r) + Y₂ D) Y₁ + Y₂(1 + r)

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