Question: question attached Suppose that there is limited commitment in the credit market, but lenders are uncertain about the value of collateral. Each consumer has a

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Suppose that there is limited commitment in the credit market, but lenders are uncertain about the value of collateral. Each consumer has a quantity of collateral H but from the point of 1view of the lender, there is a probability othat the collateral will be worth p in the future period and probabilityr 1- othat the collateral will be worthless in the future period. Suppose that all consumers are identical. la} Determine the collateral constraint for the consumer and show the consumer's lifetime budget constraint in a diagram. [b] How will a decrease in g affect the consumer's consumption and sayings in the current period, and consumption in the future period? Explain your results

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