.Help me to solve the following questions.

1. Consider two countries, Home and Foreign. Suppose Home and Foreign output growth rates (or income growth rates) are 0.5% and 3%, respectively. Suppose that the Home central bank allows the money supply to grow by1% every year, while the Foreign central bank chooses to maintain money growth of 5% per year. Use the simple monetary model and the (approximated version of) relevant equations.

(a) What is the inflation rate in the Home country?

(b) What is the expected rate of change in the Home-Foreign nominal ex-change rate, EH/F(i.e. units of Home currency per unit of Foreign currency)? State clearly whether it is depreciation or appreciation of the Home currency against the Foreign currency.

(c) Suppose that the Home central bank wants to maintain an exchange rate peg with the Foreign currency. What money growth rate would the Home central bank have to choose to keep the value of the Home currency fixed relative to the Foreign currency?

2. Below is a quote (with minor modification) from The Economist(October 6,2012 issue):The Reserve Bank of Australia cut nominal interest rates to 3.25% on October 2nd,and the Aussie dollar's strength is now subsiding. Explain this observation in words (i.e. without using equations or figures),based on the asset approach (money and forex markets). Take Australia as the home country and make sure to provide an intuitive explanation. (This question is meant to see how well you understand the mechanism of the model.)

1. State the OLS estimation criterion and derive the normal equations 2. The estimated linear demand function of D = BO + 8 1 P + 8 2 Y + U is. D = 65.2 - 96P +0.28Y (-3.06) (4.93) (2.1) R =0.903 Where the figures in the parentheses are estimated standard errors, P = price, Y = Income and R is the coefficient of multiple determination. a) Interpret the estimated regression coefficients. b) Is the observed negative relationship between D and P justifiable a priori? c) Are the estimates statistically significant? Explain. d) How would you interpret RZ? 3. Given the data below 40 44 46 48 52 58 60 68 74 IX 6 10 12 14 16 18 22 24 26 32 X2 S 9 17 24 a) Estimate the partial regression coefficients in the model, the standard errors of the slope coefficients and R2. b) Test at the 5% level of significance for (i) , and (ii) B2 c) Construct the 95% confidence interval for (i) 8, and (ii) B2 Construct the ANOVA table Test the overall significance of the model at 5% (use the F-test). 4. From the following data estimate the partial regression coefficients, their standard errors the adjusted and unadjusted R* values. Y = 367.693 X2 = 402.760 XJ = 8.0 E( - 1) = 66042.269 [(X2 -X2)? = 84855.096 [(Xx- X;) =280.000 E(Y - D)(X2 - X2) = 74778.346 E(Y - n)(X> - X,) = 4250.900 [(Xx - X2)(Xx - X;) = 4796.000 1 = 15 5. To examine the hypothesis that government deficits (XI) and inflation (X2) increase interest rates (Y) an econometrician estimated the following regression model using annual data from 1977 to 2017: Y, = 4.25+0.04X1, +0.25X21 (2.14) (0.002) (0.005) R2= 0.98There are two segments of the market represented by demand relationships: Q = 90 3p and Q = 180 6p. There's a constant marginal cost of $10 to serve the market. There are 5 consumers in each of the two demand segments. In other words, there are 5 people whose individual demand is represented by Q = 30 3p and 5 people whose demand is represented by Q = 180 6p. (a) Find the optimal two-part tariff scheme if you are required to charge a per-unit price of $10, but must offer the same xed price to both types of demanders. Report both prices and prots. (b) 12 points Find the optimal twopart tariff scheme if you are free to set any per unit price but must offer the same xed price to both types of demanders. Report both prices and prots. ((3) Find the optimal twopart tariff scheme if you are able to offer a different xed price to both types of demanders (and any per-unit price). Report both prices and prots