Assume that as a result of international negotiations, it is announced in period =0 that the foreign sector credit constraint will be removed from period =7 onward. Describe the effects of these negotiations on consumption, assets, trade balance and current account and provide economic interpretation. [max 700 words] Consider a deterministic small open economy populated by a large number of identical individuals receiving an endowment of income in every period. The preferences of the representative individual are described by the intertemporal utility function U, = Y22, Btu(c,), with f = 1/(1 + p). In every period the representative individual faces the budget constraint +(1+r)d,_, =y, +d,. The initial asset holding is given by d_, = 0. The foreign sector lends/borrows at the interest rate r* = p. All variables and parameters have standard interpretation. The endowment income changes over time according to y, = A'y, where y > 0 fort >0and 1