Suppose that you have $100 today and expect to receive $100 one year from today. Your money market
account pays an annual interest rate of 25%, and you may borrow money at that interest rate. Com e
budget constraint between “spending today” on the horizontal axis and “spending a year from today on
the vertical axis. What is the slope of this budget constraint?
-0.75
-1.00
-1.25
-2.25