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# consumption as much as possible. They each live for five periods, the last two of which are retirement. Here are their incomes earned during each...

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consumption as much as possibie. They each live for five periods, the last two of which are retirement. Here are their incomes earned
during each period: Period Dave Christy
1 “(30.000 540.931)
2 100.001} lﬂﬂﬂﬂﬂ
3 100,0[lﬁ Iﬁﬂ,ﬂﬂﬂ
4 I} U
5 [1' U They both die at the beginning of period six. To keep things simple, assume that the interest rate is zero for both saving and borrowing and that the life span is perfectly;r predictable. a. For each individual, compute consumption and saving in each
period of life. b. Compute their wealth (that is, their accumulated saving) at the
beginning of each period, including period six.
c. Graph consumption, income, and wealth for each of them, with the period on the horizontal axis. Compare your graph to
Figure 15-12.

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