Problem

Look back to the numerical example graphed in Figure 1A.1. Suppose the interest rate is 20...

Look back to the numerical example graphed in Figure 1A.1. Suppose the interest rate is 20%. What would the ant (A) and grasshopper (G) do if they both start with $100,000? Would they invest in their friend’s business? Would they borrow or lend? How much and when would each consume?

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Solutions For Problems in Chapter 1