13:56 1) The following are known for the economy in question: C = 200 + 0.8 YD 1 = 150 - 101 + 0.1Y T = 250 G = 150 Ma = 1000 P + 500 -100i + Y MS = 500 Note: the interest rate i is expressed as a percentage (eg if you find i = 2, then substitute in equations 2, not 0.02.) The following are known in the labor market: Y = 2N is the production function in economy pe = 3 Z = 4500 M = - 2000 Salary Ratio: W = 500P + 4N + z Value setting ratio: W = 2000P - M e: the values that the variables get are not realistic. ey make it easier to solve the problem. AA chegg.com C13:56 III '6' C) The following are known in the labor market: Y = 2N is the production function in economy Pe=3 z=4500 u = 2000 Salary Ratio: W = SOOP + 4N + 2 Value setting ratio: W = ZOOOP u Note: the values that the variables get are not realistic. But they make it easier to solve the problem. a) Identify the relationships AD and AS. b) Find the interest rate, income and price level in equilibrium. c) The balance you specified in b) is short or medium term and why? If it is not midterm, find the price and income level in the midterm balance. 2) Explain and illustrate diagrams (ADAS) how each of the following affects price level and income. a) decrease in the expected price level b) increase in employment c) reduction in markup (d) a reduction in the unemployment benefit. - l-___A -_-1 n_- -___-_- A; 8 chegg.com