Question: Please explain if the following statement is true or false:In the two-country period model, the response of theCurrent Account to a temporary but positive Terms

Please explain if the following statement is true or false:In the two-country period model, the response of theCurrent Account to a temporary but positive Terms of Trade shock is SMALLER than its response to a permanent but positive Terms of Trade shock.

Use equations to support your answer.For simplicity assume a logarithmic utility function

U=ln(C_1) + ln(C_2).

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