Question: 3. a) Derive the Euler equation in the context ot'the of the two-period model ofChapter 9. Discus its optimality property in intertcmporal optimization. b) Derive

3. a) Derive the Euler equation in the context ot'the of the two-period model ofChapter 9. Discus its optimality property in intertcmporal optimization. b) Derive the Euler equation in a multi-period context, assuming the consumer lives forever from now to infinity. That is, maximize with respect to consumption. 2:203: U(ct) subject to EEDR" C: S W, 1 . . . . . . where ,8 = m is the consumer's discount factor, 0

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