The equation $u ^ { \prime } \left( c _ { \text {todey } } \right) = \beta ( 1 + R ) u ^ { \prime } \left( c _ { \text {fyture } } \right)$ is called:
A) the Euler equation
B) the Fisher equation
C) the quantity equation
D) Ricardian equivalence
E) transition dynamics

Question

Quizplus · Accepted Answer

The Euler equation is a fundamental equation in economics that describes the intertemporal consumption choices of an individual, balancing the marginal utility of consumption today with the discounted marginal utility of future consumption.

The Equation u′(ctodey )=β(1+R)u′(cfyture )u ^ { \prime } \left( c _ { \text {todey } } \right) = \beta ( 1 + R ) u ^ { \prime } \left( c _ { \text {fyture } } \right)u′(ctodey ​)=β(1+R)u′(cfyture ​)

The Equation $u ^ { \prime } \left( c _ { \text {todey } } \right) = \beta ( 1 + R ) u ^ { \prime } \left( c _ { \text {fyture } } \right)$