In detail please:

c. (5 points) "In the long run, if China continues to peg its currency to the dollar at an abnormally low value, it may incur a significant increase in its price level."Question 5 {I'll-'[a'mcrnliieuzlliinitimlies,r 30 points). Assume that+ in the short runt there are two types of \"shocks" which may cause the level of GDP to deviate from the long run1 full employment level: [1} changes in autonomous investment spending; and [2] changes in autonomous money demand. Explain how you reached your results for all the parts of this question (a. through d.]. You should feel free to use graphs or equations where appropriate. For all the parts of this question (a. through d.}, analysis should he conducted for the short run only. a. [9 points} Suppose that the Fed sticks to money supply targeting: in response to any investment spending or money demand shocks, the Fed will leave the money supply at the predetermined and targeted level. How will this money supply targeting strategy affect the deviations of output from the full employment level under each of the two types of shocks?I b. (5 points) "Over time, the Chinese government can maintain an unfair trading relationship with the United States by pegging its currency to the dollar at a low level."d. (5 points) "The only way for the United States to close its bilateral trade deficit with China is to either raise national savings in the U.S. or reduce investment in new plant and equipment in the U.S."Question 4 (Macroeconomics? 30 points}. The relationship between China and the United States is often in the news. To refresh your memory, here are four facts about the Chinese economy: I China manages its exchange rate with the duller. I China runs a trade surplus with the United States. I The Chinese central bank owns a large nurnher of US. Treasury bills. I Individual Chinese residents are not free to invest their savings in foreign coun tries as they would like. Any movement away from a managed exchange rate would probably include a relaxation of these restrictions. Now evaluate the following claims below with three to ve sentences for each. You should also feel free to use graphs or equations where appropriate. 1four goal is to discuss why the claim is true, partially true, or not true at all. a. [5 points) \"Cheap imports from China come a steep oost lost jobs and lower wages for American workers.\