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Two-Period OLG Model. Please help me answer the following question (Part (b) and (c)) in detail with reasoning. It is university-level macroeconomics. Thank you. Consider

Two-Period OLG Model. Please help me answer the following question (Part (b) and (c)) in detail with reasoning. It is university-level macroeconomics. Thank you.

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Consider the following two-period OLG model in which each generation has the same number of people, N. The young generation receives an endowment of 2:1 when young and :32 = (1 + gnarl when old, where 915 can be positive or negative. The endowments of the young generation grow over time at the rate 7. Each unit of saving (by the young) is invested and produces 1+ ,u units of output (a > 0) when they are old. Each of the young generation maximizes In alt + 11,, lncuirl, where on is consumption when young and 62,3544 is consumption when old. (a) Derive the comumption and savings of the young generation and the consumption of the old generation. (b) How do changes in air, a, r and 'y affect these solutions? ((3) If 95 = p. how does this affect the solution

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