I a. I.\" I. l.' r 3. Suppose that the government introduces a tax on interest earnings. That is. borrowers face a real interest rate of 3' before and after the tax is introduced, but lenders receive an interest rate of [l - I)?" on their savings, where :r: is the tax rate. Therefore. we are looking at the effects of having 1' increase from zero to some value greater than zero. with r assumed to remain constant. [a] Show the effects of the increase in the tax rate on a consumer's lifetime budget constraint. {b} How does the increase in the tax rate affect the optimal choice of consumption [in the current and future periods) and saving for the consumer? Show how income and substitution effects matter for your answer, and show how it matters whether the consumer is initially,r a borrower or a lender