(20 marks) Consider the twoperiod economy where the representative consumer (i.e., m = 1) has incomes of y in the current and y' in the future period, and faces a real interest rate in the credit market of 'r. The government does not have any expenditures in the current or future period, i.e., G = G' = 0, but instead runs a loan program. The government makes loans to the consumer of amount L in the current period at the lower than market rate of r9