An economy is described by the following set of equations

C = 0.5 + 0.9YD

I = 1 0.5i

G = T = 0

P = 4W

M/P = 80

W/P e = 0.05Y

L(i, Y) = 0.5Y 5i

(a) Derive the Aggregate Supply curve for this economy

(b) Derive the Aggregate Demand curve for this economy

(c) What is the "medium-run" output for this economy?

(d)If P e > P, would this economy be in a state of underemployment or overemployment? Explain the mechanism.