Can you please answer these two questions? I have shared the picture of the two questions. Dual Mandate: Suppose the central bank has a dual mandate. This implies thefollowing IS-MP-AS model:IS:Y=a-b(R₁ - 7)MP:R₁-F = m(₁ − #) + dŸ₁AS:π₁ = πt_1 + UY + o(a) Why does the above model represent a dual mandate?(b) Solve for the AD curve of this economy.(c) Compare the slope of the AD curve in this economy to the slope of an ADcurve in an economy with a single mandate (i.e. set d = 0.). Does the slopemake sense given the central bank's objectives? Explain using a graph.in m

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Dual Mandate: Suppose the central bank has a dual mandate. This implies the following IS-MP-AS model:

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter11: Fiscal Policy: The Keynesian View And Historical Development Of Macroeconomics

Section: Chapter Questions

Problem 5CQ

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Can you please answer these two questions? I have shared the picture of the two questions.

Dual Mandate: Suppose the central bank has a dual mandate. This implies the
following IS-MP-AS model:
IS:
Y=a-b(R₁ - 7)
MP:
R₁-F = m(₁ − #) + dŸ₁
AS:
π₁ = πt_1 + UY + o
(a) Why does the above model represent a dual mandate?
(b) Solve for the AD curve of this economy.
(c) Compare the slope of the AD curve in this economy to the slope of an AD
curve in an economy with a single mandate (i.e. set d = 0.). Does the slope
make sense given the central bank's objectives? Explain using a graph.
in m

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