Please show how one would solve 2a), 2e) to 2m) using R studio codes. (don't worry about 2b,c,d). Please be as thorough as possible when providing the codes. I am struggling to know if I am getting the right answers when doing it.

\fThe redundant equation is again it, = h\". In this model, the government issue; a xed and exogenous number of long term bonds .319. The variable 8mm is an exogenous shock on the expected price of the long term bond. "a: is the interest rate paid by the central bank on money. 'We know it is possible to represent the demand for assets in matrix form as has Am ALI 9'12 A13 rm: 5M = A241 05+ A11 A23 132,3 rbj 9: bL,I'BLd.t Ash has 9'32 113,3 REL: ',I 1: 31,4 + A291 yd\" 33,1 The le pammetmsi includes the value of the parameters and exogenous variables for this model. However, certain parameters are missing. 2a} Considering what you know about the equations for the demand for various nancial assets, and assuming that the matrix Q is symmetric, nd the value of all the missing parameters A\2h) How do you rationalize that an increase in the interest rates on money can have an impact on long term interest rates in this model? Does the rate on government bills, 11, changes following the increase on Th? How do you explain this result? 2i) Plot the govenment decit following the increase in the interest rate on money by the central bank. Dene the decit as government revenues minus government expenditures. Does the increase in Th generate a budget surplus or a budget decit? How do you explain this result? For the following, we postulate again that Th = 0. Assume now that a newly elected government decides to reduce gt by 10% from its current level. This policy is justied by the need to reduce long term interest rates and make the mortgage market more affordable for households. The underlying assumption is that it is government spending and indebtedness that is responsible for high long term interest rates. 2j) In this model, total government debt at the end of period t is given by 133,; + prltBlet. Plot the total government debt following the reduction in 9.3. Does total government debt decline, as expected by the new government? 2k) Now, plot total government debt as a share of GDP, yt. From this point of view, do you note an improvement in the state of public nances following the reduction in goverment spending gt. How can you reconcile your ndings in 2j) and 2k) 21) Plot the evolution of the long term interest rate following the reduction in 9:. Is the government policy effective at reducing the long term interest rate and making the mortgage market more affordable? How do you explain that result? The debt management strategy is the tool by which the government decides the share of total government debt that it nances by issuing short term bills and what share is nanced by issuing long term bonds. 2m) In addition to cutting government spending 9;, could the government have done something in terms of debt management strategy to insure that its objective of reducing the long term interest rate would have been effectively met? Justify why your proposition would have been helpful