Course ID: 105517 Part A (20 marks) Answer both exercises in Part A in one SEPARATE examination book. Do not answer questions on this examination paper. Exercise 1 (10 marks) Consider two identical countries, Aand B, in our standard overlapping generations model. In each country, the population of every generation is 200, and each young person wants money balances worth 40 goods. Assume that the money of country Ais the only currency that currently circulates in the two countries. There are $1000 of country Amoney split equally among the initial old of both countries. a. Find the value of a country Adollar. b. Find the consumption of the initial old. Now, suppose country Bissues its own money, giving €12 to each of the initial old of country B. To ensure a demand for its currency, country Bimposes foreign-exchange controls. c. Find the value of one euro and the value of one dollar.