With logarithmic utility, the Euler equation is given by:
A) $\beta = \left( 1 / c _ { \text {todev } } \right) = ( 1 + R ) \left( 1 / c _ { \text {future } } \right)$
B) $c _ { \text {today } } = \beta ( 1 + R ) c _ { \text {future } }$
C) $\left( c _ { \text {future } } / c _ { \text {todey } } \right) = \beta ( 1 + R )$
D) $$c _ { \text {today } } = \frac { c _ { \text {future } } \beta } { 1 + R }$$
E) $\left( \frac { 1 } { c _ { \text {today } } } \right) = \left( \frac { 1 } { c _ { \text {future } } } \right) \beta ( 1 + R )$

Question

Quizplus · Accepted Answer

The Euler equation for consumption with logarithmic utility is derived from the condition that the marginal utility of consumption today equals the discounted expected marginal utility of consumption in the future, leading to the equation $\left( c _ { \text {future } } / c _ { \text {today } } \right) = \beta ( 1 + R )$.

With Logarithmic Utility, the Euler Equation Is Given By: A) β=(1/ctodev )=(1+R)(1/cfuture )\beta = \left( 1 / c _ { \text {todev } } \right) = ( 1 + R ) \left( 1 / c _ { \text {future } } \right)β=(1/ctodev ​)=(1+R)(1/cfuture ​)

With Logarithmic Utility, the Euler Equation Is Given By:
A) $\beta = \left( 1 / c _ { \text {todev } } \right) = ( 1 + R ) \left( 1 / c _ { \text {future } } \right)$