Thank you, please answer the following questions

2. Assume that prior to the onset of the pandemic, the collateral constraint (based on value of housing asset) facing the representative Australian consumer was not binding. Then, suppose that the value of collateral falls due to the pandemic, all else equal. [16 Points] a) b) With the aid of a diagram, determine what the consumer's optimal response would be and explain, assuming the constraint does not bind even after the fall in housing prices during the pandemic. [4 Points] Suppose the collateral constraint facing the consumer at the onset was binding, how would the consumer's optimal response differ from your answer in part A? [2 Points] In addition to the binding housing collateral constraint in part B, suppose that the consumer's current taxes fall due to the pandemic-related tax cuts by the government, how does this affect the consumer's behavior? Explain with the aid of a diagram, assuming further that the government will increase taxes in the future. [5 Points] Suppose that housing prices rise following the removal of lock-down restrictions and the introduction of vaccines. Explain what the consumer's Optimal response would be when the collateral constraint is binding vs not binding. [5 Points]