Exercise 6.2 (Certainty Equivalence) Consider a two-period, small, open, endowment economy populated by households with preferences described by the lifetime utility function (0 - 0) - =E(C) - OF, 2 where C represents a satiation level of consumption, and E denotes the mathematical expectations operator. In period 1, households receive an endowment 41 = 1 and have no assets or liabilities carried over from the past (B; = 0). Households can borrow or lend in the international financial market at the world interest rate r* = 0. Compute consumption and the current account in periods 1 and 2 under the following two assumptions regarding the endowment in period 2, denoted Q2: 1. (2 equals 1 and2. (), is random and takes the values 0.5 with probability 1/2 or 1.5 with probability 1/2. Provide intuition for your findings