Draw the following intertemporal budget constraints. Be sure to label the intercepts and the slope(s). a. If financial institutions operate in a way where the rate of borrowing is higher than the rate offered to lenders, i.e., rb > rl how would the budget constraint change. b. If financial institutions operate in imperfect credit markets such that they allow a borrower to borrow up to a maximum of 50% of her future income. c. If the government decides to offer a transfer subsidy TS1 in period one and impose a tax in period two such that T2 = TS1 x (1 + r).

Draw the following intertemporal budget constraints. Be sure to label the intercepts and the slope(s). a. If financial institutions operate in a way where the rate of borrowing is higher than the rate offered to lenders, i.e., rb > rl how would the budget constraint change. b. If financial institutions operate in imperfect credit markets such that they allow a borrower to borrow up to a maximum of 50% of her future income. c. If the government decides to offer a transfer subsidy TS1 in period one and impose a tax in period two such that T2 = TS1 x (1 + r).

College Algebra (MindTap Course List)

12th Edition

ISBN:9781305652231

Author:R. David Gustafson, Jeff Hughes

Publisher:R. David Gustafson, Jeff Hughes

Chapter6: Linear Systems

Section6.8: Linear Programming

Problem 4SC: If the cost of each Robust tablet increases to 75 c and the cost of each Vigortab increases to 80 c...

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