In the two-period model, suppose a household's income in the first period is $30,000, income in the second period is $60,000, and the real interest rate is 30 percent. What is the household's maximum spending in the second period, if it decides to save the entire amount in the first period?
A. $40,000
B. $50,000
C. $80,000
D. $99,000
Answer: D
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