1. In the standard two-period modeling suppose the govememnt has to collect R in present discounted values through tax. However, the lumpsum tax is not available and the revenue can be collected either through (2') taxing consumption in both periods at rate Tc [so the consumption goods cost (1 + Tc) to the consumer in each period], or (ii) taxing saving / borrowing at rate T3 [so the return to saving is (1 1's) (1 | 7') and the rate of repayment of loans is (1 + 1-3) (1 + 'r)]. (a) Draw the lifetime budget constraint under (73) Clearly label the axises, the coordinates of the intercepts, the endowment point, and the kinks [if there is any]. (b) Draw the lifetime budget constraint under (ii). Clearly label the axises, the coordinates of the intercepts, the endowment point, and the kinks [if there is any]. (0) Redo (a) and (b) and superimpose the indifference map. Which policy makes the representative consumer better off? Hint: refer to the section of distorting tax in Chapter 5 ((1) Explain your intuition in (c)