Only Parts (e)-(i) please

1. Derive the AD and AS relations. Consider the following economy: C=cn+ci(YT) 1:50 +b1Ybzi Government spending is given by G. The real money supply is MVP, and real money demand is given by [13171. Suppose the wage is set according to W = P'(1 at: +2). The production inction in this economy is given by Y = N, where N is employment, and labor force is given by L. The price of goods is set according to P = (1 + m)W Note that b0, b1, bz, ca, 121, do, a, m, z are positive constants. (a) Derive the IS relation. (b) Derive the LM relation. (c) Combining your results in (a) and (b), derive the AD relation. Explain why it is called the AD (aggregate demand) relation. ((1) Derive the AS relation. Explain why it is called the AS (aggregate supply) relation. (e) Solve the output in the medium run, i.e., potential output Y\". (i) How does a monetary expansion affect Y\"? How does a scal consolidation affect Y\"? Do your results t the predictions from the examples in our lecture? (g) Solve real money supply in the medium run, M [P. (h) How does a monetary expansion affect the price level in the medium run? How does a scal consolidation affect the price level in the medium run? Do your results t the predictions from the examples in our lecture? (i) Suppose the central bank is committed to a monetary policy that increases nominal money supply 2% per year. What is ination rate in the medium run