iv, v and vi please Consider the following model(ii)(iii)(iv)(v)(vi)y(t) = 9+0.2(m— p(t))π(t+1)=1.2(y(t)- y₂)m = 5 y₁ = 6What is the equilibrium price level?What is the equilibrium price level after the money supply increases from 5 to8?What is the equilibrium price level if the natural level of income falls from 6to 4 (a rise in the natural level of unemployment)?plot p(t) for t = 0 to20 on one graph for the price-adjustment coefficients (slope of the Phillipscurve) 1.2, 1.5 and 2, assuming p(0) = 10. Assume the initial price is 10, m = 5and yn = 6.Also, plot on one graph the dynamic responses to income, y(t). [Hint: if theinitial price is 10, what is the initial income?]Comment on your results. t012m =yn =p2(t)O. =B1B2B3p1(t) y1(t)p2(t) y2(t)10100010012.47.5212.414.2247.527.155212.414.2247.527.155214.224 7.15523 15.61024 6.877952 15.61024 6.877952 15.61024 6.8779524 16.66378 6.667244 16.66378 6.667244 16.66378 6.6672445 17.46447 6.507105 17.46447 6.507105 17.46447 6.5071056 18.073 6.3854 18.073 6.3854 18.073 6.38547 18.53548 6.292904 18.53548 6.292904 18.53548 6.2929048 18.88697 6.222607 18.88697 6.222607 18.88697 6.2226079 19.15409 6.169181 19.15409 6.169181 19.15409 6.16918110 19.35711 6.128578 19.35711 6.128578 19.35711 6.12857811 19.5114 6.097719 19.5114 6.097719 19.5114 6.09771912 19.62867 6.074267 19.62867 6.074267 19.62867 6.07426713 19.71779 6.056443 19.71779 6.056443 19.71779 6.05644314 19.78552 6.042896 19.78552 6.042896 19.78552 6.04289615 19.83699 6.032601 19.83699 6.032601 19.83699 6.03260116 19.87612 6.024777 19.87612 6.024777 19.87612 6.02477717 19.90585 6.01883 19.90585 6.01883 19.90585 6.0188318 19.92844 6.014311 19.92844 6.014311 19.92844 6.01431119 19.94562 6.010876 19.94562 6.010876 19.94562 6.01087620 19.95867 6.008266 19.95867 6.008266 19.95867 6.00826656y2(t)0.21.21.21.2p(t)y(t)2222 900201816141210768-p100Price adjustment-yi(t)p2(0)Income adjustmentt-y2(1)p3t)y3(t)20

Inflation is an economic phenomenon characterized by a sustained and general increase in the overall…

Consider the following model (1) (11) y(t) =9 +0.2(m-p(t)) π(t+1)=1.2(y(t)—yn) m = 5 y₁ = 6 (iii) What is the equilibrium price level if the natural level of income falls from 6 to 4 (a rise in the natural level of unemployment)? 3 What is the equilibrium price level? What is the equilibrium price level after the money supply increases from 5 to 8? (iv) plot p(t) for t=0 to 20 on one graph for the price-adjustment coefficients (slope of the Phillips curve) 1.2, 1.5 and 2, assuming p(0) = 10. Assume the initial price is 10, m=5 and yn = 6. (vi) Also, plot on one graph the dynamic responses to income, y(t). [Hint: if the initial price is 10, what is the initial income?] Comment on your results.

Consider the following model (1) (11) y(t) =9 +0.2(m-p(t)) π(t+1)=1.2(y(t)—yn) m = 5 y₁ = 6 (iii) What is the equilibrium price level if the natural level of income falls from 6 to 4 (a rise in the natural level of unemployment)? 3 What is the equilibrium price level? What is the equilibrium price level after the money supply increases from 5 to 8? (iv) plot p(t) for t=0 to 20 on one graph for the price-adjustment coefficients (slope of the Phillips curve) 1.2, 1.5 and 2, assuming p(0) = 10. Assume the initial price is 10, m=5 and yn = 6. (vi) Also, plot on one graph the dynamic responses to income, y(t). [Hint: if the initial price is 10, what is the initial income?] Comment on your results.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter9: Aggregate Expenditures

Section: Chapter Questions

Problem 8E

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