(1) Suppose you earn $1,000,000 over your working life, and the real interest rate is 50%. How much will you save and how much will you consume in each part of your life? (5 分)

題組內容

1. Suppose you divide your life into two periods: working age and retirement age. When you work, you earn labor income y; when retired, you earn no labor income, but must live off your savings and the interest it earns. While working, you save the amount s, earning interest at a constant rate r, so you have (1 + r)s to live on when retired. Because you don't need to consume as much when retired, you want to set consumption when working ($c^w$) twice as high as consumption when retired ($c^r$).

2. "The Federal Open Market Committee (FOMC) outlined its approach to monetary policy normalization in the Policy Normalization Principles and Plans that it issued after its September 2014 meeting. The FOMC indicated that there would be two main components to policy normalization: gradually raising its target range for the federal funds rate to more normal levels and gradually reducing the Federal Reserve's securities holdings . The Committee augmented these Principles and Plans at its March 2015 FOMC meeting by announcing more details about the approach it would use to raise the federal funds rate and other short-term interest rates." Based on the above announcement by FOMC, please discuss, in detail with macroeconomic theory, the impacts on (a) the prices and yield rates of government securities, (b) the (nominal) exchange rates, and (c) the aggregate economic activities in the United States.(15 分)

題組內容

(1) Suppose you earn $1,000,000 over your working life, and the real interest rate is 50%. How much will you save and how much will you consume in each part of your life? (5 分)

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