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    Finding optimal values

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    i) Find the optimal values of Ct, Ct+1, and St.
    ii) Is St positive or negative? Why?
    iii) Does the income or substitution effect dominate when the interest rate increases?

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    © BrainMass Inc. brainmass.com October 10, 2019, 4:32 am ad1c9bdddf
    https://brainmass.com/economics/macroeconomics/finding-optimal-values-466131

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    Solution Summary

    This solution provides steps to find the optimal values.

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