(a) Write down the consolidated life time budget constraint for the households using T1 and T2.
Macroeconomics 1. Let r = 0 and β = 1. Households live for two periods and have utility log(c1) + log(c2) and pre-tax income $3000 each period. The government needs to finance a project in the first period that costs $300 each household. Policy 1: tax $300 in the first period. Policy 2: issue debt […]