Part IV. (2 x 20 pts=40 pts) Overlapping Generation Model with Production Utility In cy + dy(1-hy) + In cold + Cold (1-hold) Production Y=AH Population Growth Nu+1= NF1 Old alive at date =1 No > 0 4. (Multiple Choice) Does Ricardian Equivalence hold for the Autarky and government Policy Equibria for this production economy? a. Yes, Ricardian equivalence holds because taxes and transfers are lump sum in nature. b. No Ricardian Equivalence does not hold because household are credit constrained. c. No No Ricardian Equivalence does not hold because taxes are not lump sum in nature. d. No, Ricardian Equivalence does not hold because the generation who receives a transfer is not always the same as that paid the taxes