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here is my question Question 2: CIA model 3 periods economy Solve the CIA model we saw in class with monetary policy rule. Assume that

here is my question

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Question 2: CIA model 3 periods economy Solve the CIA model we saw in class with monetary policy rule. Assume that instead of a 2 period economy, the economy last for 3 periods. 1. Write the budget constraints for periods 1, 2 and 3 in nominal terms. 2. Write the intertemporal budget constraint in nominal terms. 3. Write the intertemporal budget constraint in real terms. 4. Apply the transversality condition. Discuss. 5. Suppose the lifetime utility function is: U(91, C2) = Ing + + 1 (1 + p ) (In (2 + 2:2) + (1 + p ) 2 (In c3 + 3) where * denotes the credit good. Compute the FOCs 6. Compute the Fisher equation for period 2 and period 3. Discuss. 7. Compute the Friedman distortion for periods 2 and 3. Discuss. 8. Show the conditions for the CIA constraints in period 2 and 3 to hold with equality. Discuss

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