A consumer's budget constraint in the future period is
A) c' = y'- t' + (1 + r)s.
B) c' + (1 + r)s = y'- t'.
C) c + s = y - t.
D) c' = y' - t' - (1 + r)s.
E) y' - t' = (1 + r)s.

Question

Quizplus · Accepted Answer

The future period budget constraint for a consumer is given by the equation c' = y' - t' + (1 + r)s, where c' is future consumption, y' is future income, t' is future taxes, r is the interest rate, and s is savings from the current period.

A Consumer's Budget Constraint in the Future Period Is