Please answer the below question using the equations provided. This is economics question.

PS curve equation: wrs = WIP = H H!\" + H 1 WS curve equation: st = WIPE = am, In} 01. Consider a closed economy with homogeneous labour, constant marginal product of labour, and where rms set prices as a mark-up over unit labour costs. Expressed in constant dollars, output per worker is $15, the opportunity cost of working is $5, and the nns' mark-up is 25%. The size of the labour force is 125. Further, in the medium-nan equilibrium the rate of unemployment is 25% and the rate of ination is 2%. a} Suppose that a permanent increase in aggregate demand causes the unemployment rate to fall by 4 percentage points. What is the new short-run equilibrium level of employment? And of real output? b} What is the impact of this permanent increase in aggregate demand on nominal wages? And on real wages? And on the rate of ination? Briefly explain. c} Assume adaptive expectations where the expected rate of inflation is equal to the rate of ination in the previous period. What's the expression for the Phillips curve corresponding to the medium-nan equilibrium of part a) above? What happens to the Phillips curve after this increase in aggregate demand? Briey explain 02: a) Consider the PS and WS curves derived above. Suppose that improvement in working conditions reduces the opportunity cost of working to $4.5. i) What are the expressions for the new PS and W3 curves? ii} What are the new values of We, Na. ya, and rr? What happens to the Phillips curve? b). Consider the PS and WS curves derived above. Suppose that technological improvement increases the marginal product of labour to $15.5 and that rms' increase their mark-ups over unit- labour cost from 25% to 315%. i) What are the expressions for the PS and WS curves now? ii) What are the values of We, Na. ya, and 11? iii} Given that the marginal propensity to consume out of wages tends to be higher than the marginal propensity to consume out of prots, what do you think it might happen in the long run