J I_ Consider a version of the economic model with the associated assumptions of Chapter 6, in which the money growth rate is a random l/ariable. Let the probability be 4/5 that g: 1 and the probability be 1/5 that g: 2. The realization of the monetary policy (the realized value of a; is kept secret from the young until all purchases have occurred that is, people do not learn Mtuntil period t is over. Prices are only thing directly observable by the young. Let l(p) = 5 + 0.219% in island i at time tk' (a) Solve for pf: using the market clearing condition. 6' (b) Can the worker make use of this price level as an indicator of the unknown monetary policy? 9 (c) How can the workers make use of the price obtained in part a to decide on their work decision? a