Question

Consider an individual who is assumed to be living for two periods, 1 and 2, earning income of Y1, Y2 and consuming C1, C2 in those two periods respectively. Assume market rate of interest to be r, and that the individual has the opportunity to be a lender or a borrower in period 1. With the help of a diagram, discuss the impact of decrease in the rate of interest (r), if an individual chose to be a lender in period 1

Answer 1

Answer:

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