question archive ine in QUESTION 1 (Total: 10 marks) Consider an economy of three-period-lived people in overlapping generations
ine in QUESTION 1 (Total: 10 marks) Consider an economy of three-period-lived people in overlapping generations
Subject:AccountingPrice: Bought3
ine in QUESTION 1 (Total: 10 marks) Consider an economy of three-period-lived people in overlapping generations. Each person is endowed with y goods when young and old and nothing when middle-aged. The young individual can invest in capital (k) which yields return x per unit after 2 periods and then the capital depreciates fully. The population of each generation born in period t is where N = n*N-1 There are no assets other than loans and capital a. Explain how credit can be used to provide for consumption when middle-aged. Follow the model discussed in class lecture to answer this question. (3 marks) b. Point out who lends to whom and write the condition for the equality of supply and demand for loans in period t Explain your answers. (3 marks) (Part of the question is on next page) perts for your tough 2 (7.5 5. EN ed TH hoan jue to post xplaint but whol Write the WPal??? ????? Write the L art Ans C write the budget constraints for the youn the middle-ased and the old with clear and fully explained/ well defined notations. (4 marks)
