Fiscal Policy Consider an economy existing for four periods following the government budget constraint as follows: at+1 = (1 + as. + G. T. a) Dene each of the variables above and explain, in words, why the equality holds. Re-writc this budget constraint during each of the four periods that the economy exists. b) The Australian government is trying to decrease the country's stock of debt. Using the equation above, discuss two possible ways this could be achieved using scal policy, only. What challenges do you anticipate? (Hint: think of how tax collections change given changes to government spending). c) Using the elements in the equation above, discuss the likely effects on the future stock of debt (3H1) of an expansionary monetam policy. Explain. d) What will the equation look like in the fourth period and what does this imply for the economy as a whole? e) Using backwards iteration from the fourth period, form and interpret (in at least two sentences) the intertemporal government budget constraint for this economy