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A two-period endowment economy as we studied in class has consumers with identical preferences and the consumption good is non storable. Suppose that there is a benevolent government (i.e. a government that seeks to maximize the welfare of consumers) that imposes lump-sum taxes and make lump-sum transfers. (Recall, taxes can be negative, in which case they are called transfers.) The government must satisfy its present-value budget constraint T2 1+r where T, denotes taxes (T, >o) or transfers (T <0) in period t. Now, suppose that the period 1 endowment income yi is much larger tthan the period 2 one, y2, but that the consumer prefers similar consumption levels in both periods. A politician claims that the welfare of consumers can be improved in this situation by imposing a tax-transfer scheme such that T? > 0 and T2 < 0. Is this possible, i.e., true or false? Briefly explain, no calculation is necessary

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