I need assistance on this hw problem

= Question 1. Suppose that the money demand function has the Cagan form. That is M AY, exp(-ai), where A, >0,0 >0, and a > 0. P, Assume that the Fisher equation holds. (In deriving your answers you should feel free to simplify by normalizing constants appropriately.) A.) Suppose that Y is constant and that the real interest rate is constant. Let m, = In M and let p. = In P. Suppose that m, follows and AR(1) process. That is, m. =P*,+8.where ||_/0,0 >0, and a > 0. P, Assume that the Fisher equation holds. (In deriving your answers you should feel free to simplify by normalizing constants appropriately.) A.) Suppose that Y is constant and that the real interest rate is constant. Let m, = In M and let p. = In P. Suppose that m, follows and AR(1) process. That is, m. =P*,+8.where ||_/