Can anyone please help to solve this? Thanks

8.5 Credit constraints and Ricardian equivalence Consider the following variant of question 1. The household solves max a (Cl) + 61.5(02) cl,a,02 at. a = 311 T1 C1 :2 =y2T2+(1+T)a a 2 b (8.5.1) (a) What does equation (8.5.1) mean? What does 5 represent? (b) Plot the household's intertemporal budget constraint. In the same graph, plot constraint (8.5.1). (0) Solve for cl, (2'2 and a in closed form. [Hint notice that the constraint (8.5.1) is a weak inequality, not an equality, so it may or may not be binding. If it is not binding, then you can use the answer from 1. Then think about What happens if it is indeed binding. Then gure out Whether or not it will be binding] (d) Show that, other things being equal, constraint (8.5.1) is more likely to be binding if i. 3/2 T2 is high ii. yl T1 is low iii. 5 is low