An Individual Who Is Considering Consumption Between Two Time Periods

question 49

Multiple Choice

An individual who is considering consumption between two time periods (year 1 and year 2) has an endowment of $20,000 in year 1 and $15,000 in year 2.If the interest rate is 5 percent,what is the maximum approximate amount that can be spent on consumption in year 1?

• A)$35,000
• B)$20,000
• C)$35,750
• D)$34,250

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Definitions:

West Coast

The westernmost region of the United States, known for its diverse landscapes, significant technological and entertainment industries, and vibrant cultural scenes.

San Francisco

A cultural, commercial, and financial center in Northern California known for its iconic Golden Gate Bridge, steep streets, and historical significance in the technology industry.

Los Angeles

A major city in California, known for its entertainment industry, particularly Hollywood, and diverse cultural influences.

Military-Industrial Production

The network of governmental and commercial involvement in the research, development, and production of military equipment and technology.