: Help me answer the following questions.

The government of a country suffering from hyperinflation has sponsored an economist to monitor the price of a "basket" of items in the population's staple diet over a one-year period. As part of his study, the economist selected six days during the year and on each of these days visited a single nightclub, where he recorded the price of a pint of lager. His report showed the following prices: Day (i ) 29 57 92 141 148 Price ( P;) 15 17 22 51 88 95 In P. 2.7081 2.8332 3.0910 3.9318 4.4773 4.5539 [i=475 [i =54,403 [Inp, = 21.5953 (In P,)' =81.1584 [in P, =1,947.020 The economist believes that the price of a pint of lager in a given bar on day i can be modelled by: In P = a+ bite; where a and b are constants and the e; 's are uncorrelated N(0,o') random variables. (i) Estimate a , b and of. [5] ii) Calculate the linear correlation coefficient r. [1] (iii) Obtain a 99% confidence interval for b. [2] (iv) Determine a 95% confidence interval for the average price of a pint of lager on day 365: (a) in the country as a whole (b) in a randomly selected bar. [7] [Total 15]Question 1 (42 p) Consider a closed economy where goods market and finalcial markets can be described by the following equations for period : C = 100 + 0.5Yd It = 200 + 0.25Y, - 200rf G = 100; T = 200 Suppose inflation excpectations in this economy is based on past period's inflation rate, i.e. n = nt-1 Let Yr = F(N,) = N; the labor force is given as constant at LF = 1000. a. (4p) Write down the IS equation for this economy.Exercise 2.1 Let Fo(t) = 1 - (1 - t/105) / for 0