A Consumer's Budget Constraint for Two Periods with Positive Interest

question 3

Multiple Choice

A consumer's budget constraint for two periods with positive interest rate r may be represented by the equation:

• A) C₁ + C₂ = Y₁ + Y₂.
• B) C₁ + C₂/(1 + r) = Y₁ + Y₂/(1 + r).
• C) C₁ + C₂(1 + r) = Y₁ + Y₂(1 + r).
• D) C₁/(1 + r) + C₂ = Y₁/(1 + r) + Y₂.

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Definitions:

Fromm

Erich Fromm, a renowned psychoanalyst and social psychologist known for his theories on social character, freedom, and human nature.

Normal Behavior

Actions or reactions that are common and accepted within a society or culture.

Erikson

A developmental psychologist known for his theory on the psychosocial development of humans, which outlines eight stages that individuals pass through from infancy to adulthood.

Identity Versus Role Confusion

Erikson’s fifth stage of psychosocial development, where adolescents face the challenge of developing a clear sense of self or risk remaining confused about their identity.