Consider the following small open economy setting: The economy exists for 3 consecutive periods. Denote the starting period Period 0. Use the Notation introduced in class. r*=5% W.1-250 (Initial external wealth position) W=0 TB0= -50 TB= +150 a) What is the economy's external wealth position at the end of period 1? (5) b) Which Trade balance in Period 2 is feasible to satisfy the economy's 3 period budget constraint. (5) c) Verbally explain the economic implications of your results. What is the difference to a closed economy setting? How would the budget constraint for a closed economy look like? (min 4 sentences) (7.5) d) Show mathematically how the long run budget constraint fulfills the No Ponzi condition. What is a Ponzi game and what does the No Ponzi condition imply for the external wealth of an economy? (min 5 sentences) (7.5)