consider a 3-period overlapping generations model in which consumers receive y >

Question

consider a 3-period overlapping generations model in which consumers receive y > 0 units when they are young, nothing when they are middle-aged, and nothing when they are old. Consumer utilities are given by the equation U(e1, e2, e3) = log(e1) + log(e2) + log(e3). Denote the number of people born in period t by Nt. assume constant population and money supply (i.e, n = 1, z = 1). assume the consumption good is non-storable. Suppose capital and fiat money both exist in this economy. Their rates of return is given by the table below: Which of the following statements are true? Capital is more risky than fiat money as an investment. Fiat money is more liquid than capital. Capital is a good long-run investment. and money ts a good short-run investment. All of the above. None of the above chains. Which of the following statements are true? Consumers will save y/3 in fiat money and y/3 in capital. Consumers will save y/4 in fiat money and y/4 in capital. Consumers will only saw in fiat money. Consumers will only saw in capital. None of the above.

Explanation / Answer

C B Hope this helps

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