Please I need help in all of them

1. Let us consider the Westerosi economy in this question. Suppose in Westeros real money demanded is given by the function: LYi()=,0.5Y5i Assume its monetary base is equal to 100 and its currency-deposit ratio is constant at 0.2. However, Westerosi reserve-deposit ratio is not a constant but is described by the function: rdr=0.52i, where i is the nominal interest rate. a. Suppose the real interest rate is 4% and the economy expects an inflation rate of 6%. Price level P is normalized to 1 . Calculate the reserve deposit ratio, the money multiplier, the money supply, and the value of output Y that clears the money market. b. Since the rdr is not a constant but is dependent on the nominal interest rate, this means that when interest rate rises, banks in Westeros lend out a greater portion of the deposits they receive. Consider the effect of this alternative specification on the LM curve. Is the LM curve flatter or steeper here than the benchmark case (where rdr is fixed). Draw the appropriate money market graph and derive the LM curve to compare this case against the benchmark case where rdr is a constant. [HINT: if rdr changes when r changes, does that alter the relationship between r and Ms or Md ? You should draw a single money market graph with both the benchmark and current cases represented, then derive the LM curves by changing Y. It should be very clear how the slopes of the LM curves would differ if you do it this way.] c. Given the new LM curve, is fiscal expansion more effective or less effective? Explain 2. Obtain data on demand deposits (WDDNS), currency component of M1 (CURRSL), and reserves of depository institutions (TOTRESNS). You can find the data on the Federal Reserve Bank of St. Louis's FRED database. Restrict your sample period to Jan 1990 - Aug 2022. a. Report the average values of demand deposits, currency component of M1, and reserves over the entire sample period. Please round your answer (in terms of billions) to 2 decimal places. b. Using the data above, calculate currency deposit ratio (cdr), reserve deposit ratio (rdr) and money multiplier (mm). Report the average values of the three series over the entire sample period. Please round your answer to 2 decimal places. c. Graph cdr,rdr, and mm over the sample period (i.e. you should have the month and year on your horizontal axis). Copy and paste your graph into your homework assignment (please DO NOT copy and paste the data, I just want to see the graph, not the underlying data). Comment on the trends you observe and the big changes you see happening to these variables during the sample period. What are the reasons for the big jumps in the values of these variables? [HINT: Remember that cdx and rdr are constructed as ratios, so changes in either the numerator or denominator will cause the series to change. Hence looking at how the numerator values and denominator values evolved over time can tell you a lot about the trends. Then, given the trends in cdr and rdr, it should be easy to figure out why mm moves in a particular direction.] 1. Let us consider the Westerosi economy in this question. Suppose in Westeros real money demanded is given by the function: LYi()=,0.5Y5i Assume its monetary base is equal to 100 and its currency-deposit ratio is constant at 0.2. However, Westerosi reserve-deposit ratio is not a constant but is described by the function: rdr=0.52i, where i is the nominal interest rate. a. Suppose the real interest rate is 4% and the economy expects an inflation rate of 6%. Price level P is normalized to 1 . Calculate the reserve deposit ratio, the money multiplier, the money supply, and the value of output Y that clears the money market. b. Since the rdr is not a constant but is dependent on the nominal interest rate, this means that when interest rate rises, banks in Westeros lend out a greater portion of the deposits they receive. Consider the effect of this alternative specification on the LM curve. Is the LM curve flatter or steeper here than the benchmark case (where rdr is fixed). Draw the appropriate money market graph and derive the LM curve to compare this case against the benchmark case where rdr is a constant. [HINT: if rdr changes when r changes, does that alter the relationship between r and Ms or Md ? You should draw a single money market graph with both the benchmark and current cases represented, then derive the LM curves by changing Y. It should be very clear how the slopes of the LM curves would differ if you do it this way.] c. Given the new LM curve, is fiscal expansion more effective or less effective? Explain 2. Obtain data on demand deposits (WDDNS), currency component of M1 (CURRSL), and reserves of depository institutions (TOTRESNS). You can find the data on the Federal Reserve Bank of St. Louis's FRED database. Restrict your sample period to Jan 1990 - Aug 2022. a. Report the average values of demand deposits, currency component of M1, and reserves over the entire sample period. Please round your answer (in terms of billions) to 2 decimal places. b. Using the data above, calculate currency deposit ratio (cdr), reserve deposit ratio (rdr) and money multiplier (mm). Report the average values of the three series over the entire sample period. Please round your answer to 2 decimal places. c. Graph cdr,rdr, and mm over the sample period (i.e. you should have the month and year on your horizontal axis). Copy and paste your graph into your homework assignment (please DO NOT copy and paste the data, I just want to see the graph, not the underlying data). Comment on the trends you observe and the big changes you see happening to these variables during the sample period. What are the reasons for the big jumps in the values of these variables? [HINT: Remember that cdx and rdr are constructed as ratios, so changes in either the numerator or denominator will cause the series to change. Hence looking at how the numerator values and denominator values evolved over time can tell you a lot about the trends. Then, given the trends in cdr and rdr, it should be easy to figure out why mm moves in a particular direction.]