Question: please answer this question I pepared in relation to International Finance. Take a two period small economy where the country have preferences U = 0109(Cr1l
please answer this question I pepared in relation to International Finance.

Take a two period small economy where the country have preferences U = 0109(Cr1l + (1 anagccm + 3109mm) This means that agents consume both traded and non-traded goods in the rst period, but in the second period they consume only traded goods. There is a xed endowment of non-traded goods in the rst period YN and an endowment YT] and Y3; of traded goods in period 1 and 2 respectively. The households have free access to international borrowing and lending at world interest rate r. a] Derive the households budget constraints in periods 1 and 2, assuming a price of non-traded goods PN. Assume the traded good price is normalized at 1. b) Given a) derive the optimal consumption of traded and non-traded goods for the household. c] Using market clearing in non-traded goods, solve for the equilibrium price of non- traded goods. d] Now, allowing separater for changes in Y1\
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