2 Multiple Choice WITH Explanation. [15 points each question] Choose the one alternative that best completes the statement or answers the question and explain your reasoning. Do not forget to include equations, graphs, or any other material to support your choice. 1. All else equal, a decrease in the terms of trade of period 2 (temporary shock) (a) raises consumption in period 1 and improves the trade balance in period 1. (b) lowers consumption in period 1 and improves the trade balance in period 1. (c) does not affect the level of consumption in period 1 (d) does not affect the current account and the trade balance in period 1