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  • Question: Consider the OLG economy discussed in class, where .  Assume there is only one good in the economy that cannot be stored and perishes at the end of the period (for example, an apple economy). Suppose . Consider two economies: in the first, households cannot save in money, while in the second, they can. Suppose prices are equal in every period. In which

    Consider the OLG economy discussed in class, where . Assume there is only one good in the economy that cannot be stored and perishes at the end of the period (for example, an apple economy).Suppose .Consider two economies: in the first, households cannot save in money, while in the second, they can. Suppose prices are equal in every period. In which economy are individuals better off?
    Group of answer choices
    In economy 1.
    Individuals are equally well-off in both economies.
    It cannot be determined.
    In economy 2.
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    Solution

    Let's analyze the two economies: 1. **Economy 1 (...

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