Question 4 (10 points) Consider an economy where the following relations holds: Y = 1.5(K)" (N)l-a, and K = 1 (productio
Posted: Sat Feb 19, 2022 2:42 pm
- Question 4 10 Points Consider An Economy Where The Following Relations Holds Y 1 5 K N L A And K 1 Productio 1 (31.71 KiB) Viewed 52 times
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Question 4 (10 points) Consider an economy where the following relations holds: Y = 1.5(K)" (N)l-a, and K = 1 (production function) yd 2.05 – 5r (demand for current output) (1+r)'w N (labour supply) 1.0201 Y Md P and i = 0 (money demand- expected inflation) 1+R w where a € (0,1). If P* is predetermined at 2.02 and r is targeted at 0.01. Find Y, N, w, and M* in the New Keynesian model with sticky prices.