please help me on these questions

1. Derive the intertemporal equilibrium allocation of the macroeconomic aggregates (consumption, assets, trade balance and current account) and give an economic interpretation to your results.

2. Assume that in periods t = 0;1 the foreing sector stops lending. Explain the implications of this for the macroeconomic aggregates of the domestic economy.

ECN'l INTERNATIONAL MONEY AND FINANCE (Reslt) Coursework *1 *.** 3'- Release Date: 14 August 2020, 12pm Submission Deadline: 21 August 2020,by12pm Instructions: 1. Answer all questions from 1 to 2. Each question has equal mark. The maximum mark for the test is 100. 2. To input math equations you have two options. One is to simply hand- writing equations and producing an image of these (using a smartphone, digital camera or scanner) which can then be inserted into a W'ord docu- ment. Alternatively, they could use \"ford end the equation editor. Please use whichever of these two options you See] most comortable with. 3. Submit using Turnitin with a departmental cover sheet. as: all" It. Consider a deterministic small open economy populated by a large number of identical individuals receiving an endowment of income in every period. The preferences ofthe representative individual are described by the intertemporal 1 utility function U. = 2 .52; (a) with ,3 = T5,. In every period the individual no faces the budget constraint 01+(1+t'g]d,_1 = yg+d'. The initial debt holding is given by (L; > 0. The oreign sector lends/borrows at the interest rate r" = p. All variables and parameters have standard interpretation. The endowment income follows the process: 3:. = AT, where f > I], A > 1 and t= 0,1. 1. Derive the intertemporel equilibrium allocation ofthe macroeconomic ag- gregates (consumption, assets, trade balance and current account) and give an economic interpretation to your results. [mm 1000 words] 2. Assume that. in periods t: 0,1 the foreing sector stops lending. Explain the implications ofthis for the macroeconomic aggregates of the domestic economy. [mm 1000 words]