3:12 PM Mon Apr 4 mpiled for stud circulate A in Figure 1. This file has been compiled for s ID 62897. Do not copy or circulate. ... wit This file has been compiled for stude Ims.brocku.ca ID 62897 (a) Use Figure 1 to explain the Ricardian equivalence theorem. Do not copy circulate. Consider the two-period model with perfect credit markets in equilibrium, where a consumer's ontimelo sumption point A in Figure 1. Suppose a tax cut in the current period, which is offset by a future tax increase such that the government balances its budget constraint over its lifetime. This change in the timing of taxation is depicted by the movement of the endowment point from E1 to E2, where optimal consumption is still Point Figure 1: Ricardian Equivalence with a Cut i this file han c' = Future Consumption 6289730 ar, Muhannad with This file has been compile Al- Angar, Mulinna Al- ID 6289730, We(1+p) copy of Do not copy fle has been compiled for stu This file has been compiled for student Al- Anpar, Muhar and with ID 642730 Mahannad with ID 6289730. Do not r circulate. Do not cop or circulate. i Current Taxes for a Lender @ @ 46% r student Al- Angar, Me This file has on inpiled for studer Mahannad with This file has been comp ID 628 ID 6289730. ID Do not copy or circula Do not copy or circulate. This file has been compiled for student Al-Angar, Muliannad with Muhannad with le has bey compiled for stude student Al-Ar ID 6289730. Do not copy or circulate. r eirene. This file has been compiled r student 1-Angar, Mahannad tudev Al-Angar, Muhanad with ID 6289730. Do not copy or circula Current Consumption we and with This file has been compiled or stade than ID 6289730. Do not copy or circulate. This file has been of ID 6289730. Do not copy