Rania is a random relocation economy where each individual receives 200 units of goods when young and nothing when old. Assume that people only want to consume when old. The rate of increase in money supply is 1.2 in each period, and the net rate of return on capital is 12 %. Answer the following: a) What contract a competitive bank offers to a mover? b) What contract a competitive bank offers to a non- mover?

Rania is a random relocation economy where each individual receives 200 units of goods when young and nothing when old. Assume that people only want to consume when old. The rate of increase in money supply is 1.2 in each period, and the net rate of return on capital is 12 %. Answer the following: a) What contract a competitive bank offers to a mover? b) What contract a competitive bank offers to a non- mover?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter17: Capital And Time

Section: Chapter Questions

Problem 17.2P

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