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Kindly assist with the following Price Setting Relation: W = P F (u,z) Wage Setting Relation: P = ( l + p ) W Goods

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Price Setting Relation: W = P F (u,z) Wage Setting Relation: P = ( l + p ) W Goods Market: Y = C(Y, T) +l(Y1 i) + G Financial Market: M5 = M\" (Y, i ) P I. Find the aggregate supply relation. Describe the channel through which the AS curve slopes upidown. (5 points) 2. Assume that the economy is at a point such that the unemployment rate is equal to the natural rate of unemployment. What does this imply about the price level and output? Explain. (5 points) 1. MACROECONOMICS ASSIGNMENT Consider an economy described by the following equations: C=a+b(YT) |=cY-di+e M_cl=fY-gi p G=G _s=M' p P=1 Derive an expression for the lS-curve and explain what this equation represents. Derive an expression for the LM-curve and explain what this equation represents. Compute the level of private saving when both the goods and the nancial market are in equilibriu m. Keeping govemment revenue (T) constant, what is the impact of an increase in government spen ding (G) on total output and private saving? Show the impact on output using an lS-LM graph Use an IS-LM graph to show the impact of an increase in the supply of money (M' ) on output. W hat happens to investment

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