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Limited commitment means one cannot credibly promise something. one saves only part of what is optimal....

Limited commitment means

one cannot credibly promise something.

one saves only part of what is optimal.

only some households are allowed to save.

there is rationing on the credit market.
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Answer #1

Solution :-

The Correct Answer is (A)

that is Limited commitment means one cannot credibly promise something .

Limited Commitment means we say inability to use long term . It is an economic model which is essential for making contract not enforceable

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