The lecture described how taxing income may change savings behavior. Suppose instead that the government taxed consumption. To be specific, suppose we have a two-period model. An individual earns labor income Y0 =$100k at time zero, and earns no labor income at time 1. The individual may consume or save that income. Savings grow at rate r=.03. For every dollar of consumption, the individual pays the tax rate =.30 to the government. a. Graph the two-period budget constraint for consumption. What is the slope? Is this tax distortionary? b. The government modifies the consumption tax somewhat so that the first $20k of consumption in each period is tax free. Now graph the budget constraint.