1. Consider the following model of the economy: Production Function: Y = A K N - MPN=A K-N where the initial values of A = 6 and K = 10. Labor Supply: N = 20 + 9w The initial conditions in the goods market are as follows: cd 100.5(Y-T) - 500r Id = 800-500r G = 100 T= 100 The initial conditions in the asset market are as follows: L 78+0.5Y 1000( + ) Nominal Money supply: M = 1800 Expected inflation is equal to 2% ( = 0.02)