Rachel earns nothing during her learning period, 1100 during her working period, and nothing during her retirement period. She has initial assets of 300. The real interest rate is zero. Rachel is not allowed to borrow by the banks. Whenever possible,Rachel wants to smooth consumption between periods. How much will she save during her working period?
(a) 400
(b) 550
(c) 700
(d) 950
Answer: B
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