Consumption function with Log preference and Fisher Equation

Hi,

Consumption: Yes, the C_t that corresponds to the tangency point (i.e. the optimal C_t) in the graph is exactly the C_t in the consumption function we derived (assuming we have log preferences).

Fischer equation: Yes, it would be nice if, when using the Fischer equation, you wrote something like: "The log-approximation of the Fischer equation is i=r+pi^e" or write it with the squiggly equals sign. But, being informal in this one regard is not going to drop you a mark in an exam. However, its like making a spelling mistake. No one is going to mark someone down for a spelling mistake. But, an exam script is littered with spelling mistakes, at some point somewhere, that script is going to loose marks. Conclusion: Where you can, be as formal as you can - don't be sloppy due to laziness. But, there are also more important things to get right in an exam first!

Best
Oliver