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Question: use the quottheory of intertemporal choicequot model in order to...

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  • Use the "Theory of intertemporal choice" model in order to analyse the effect of the following on consumption and saving:
    1. A decrease in disposable income at period 2.
    2. An increase in the interest rate for a consumer with negative saving.
    3. A decrease in the interest rate for a consumer with positive saving.
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