(d) (5 marks) Compute as a percentage of GDP the maximal current account deficit in period 1 that is feasible for the economy.In answering this question, assume that there are no valuation changes of assets, that the net international compensation to employees equals zero and that there are no net unilateral transfers. Consider a three-period economy that at the beginning of period 1 has a net foreign asset position of 175. In each of the three periods 1, 2 and 3, GDP is 200. The interest rate on bonds held between any two consecutive periods is 6 percent; that is, To = r1 = r2 = 'r = 0.06. (a) (4 marks) For this part of the question only, assume that in period 1, the economy runs a current account decit of 5 percent of GDP. Find the trade balance in period 1 (TBl), the current account balance in period 1 (CA1), and the country's net foreign asset position at the beginning of period 2 (Bl). (b) (1 mark) State the transversality condition for this economy. (c) (4 marks) For this part of the question only, assume that in period 1, the economy runs a current account decit of 5 percent of GDP and that in period 2, the trade balance of the economy is zero, that is, T32 = 0. Is the economy living beyond its means? To answer this question nd the economy's current account balance in period 3 and the trade balance in period 3. Is this value for the trade balance feasible? [Hintz Keep in mind that the trade balance cannot exceed GDP]