Consider a two-period endowment economy with a single representative agent. That agent's utility function is: U=In(ct) + (1/2)In(Ct+1) In this endowment economy, output is 100 in period t and 150 in period t+1. What is the equilibrium interest rate (r) in this economy? Write your answer as a percentage, but omit the percent sign. So if you think r=0.1, that's 10%, but write 10. Similarly, if you think r= 1.5. that's 150%. but write 150.

Consider a two-period endowment economy with a single representative agent. That agent's utility function is: U=In(ct) + (1/2)In(Ct+1) In this endowment economy, output is 100 in period t and 150 in period t+1. What is the equilibrium interest rate (r) in this economy? Write your answer as a percentage, but omit the percent sign. So if you think r=0.1, that's 10%, but write 10. Similarly, if you think r= 1.5. that's 150%. but write 150.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter13: General Equilibrium And Welfare

Section: Chapter Questions

Problem 13.5P

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