answer the following questions

Now we introduce another asset into the economy -nominal bonds. Nominal bonds are issued by the government and pay a net nominal interest rate i in each period where i > 0. The government imposes a legal restriction such that individuals must carry a real money balance of at least q units of the consumption good from young to old. That is, the amount of money held by a young individual should be at least worth q units of the consumption good. Assume that q is a small number and exogenously given. (e) Let be denote a young individual's holding of the nomina bonds. Find an individual's budget constraints when young and when old. (1 mark) (f) Solve for the optimal choices of bond holding and consumption allocation (b* , c;, c;). (2 marks) (g) Explain how the choices of (b", cj, c;) would change if q is very big but less than 10? Characterize the choices of (b", c;, c; ) as much as you can. (1 mark)5. Consider the standard OLG model with money. Individuals are endowed with 10 units of the perishable consumption good when young and nothing when old. There are 1000 individuals in every generation. Each generation has identical preferences where L (C1, 02) = 01 * 02. There exists one asset in the economy -money. The money supply grows at a gross rate z every period, Me = =Me_, where 2 2 1. The new money created is used to finance government purchases G in real terms. The initial old are endowed with Mo units of money. We focus on stationary allocations