Write the given budget constraint for each period

Question

Problem

The intertemporal budget constraint with three periods: Consider an economy that exists for three periods: period 1, period 2, and period 3. In each period, the government must satisfy the budget constraint B_t+1 = (1+i)B_t + G_t - T+ .

(a) Write this budget constraint for each period.

(b) What must be true about B₄?

(c) Using the result from part (b), solve the period 3 budget constraint for B₃, and substitute this back into the period 2 budget constraint.

(d) Solve this new version of the period 2 budget constraint for B₂, and substitute the result back into the period 1 budget constraint.

(e) At this point, you should have the intertemporal budget constraint for the three-period economy. Interpret this equation.

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.