Question: Answer to best ability please and thank you. Consider the same OLG economy as above, where each generation has 14 bananas when young, and 6
Answer to best ability please and thank you.

Consider the same OLG economy as above, where each generation has 14 bananas when young, and 6 bananas when old. In period t=1, central bank prints out 4 unit of monies, given to gen 0 for free. In period t=2, central bank will double the money supply by printing out another 4 units of monies. 1. Suppose the exchange rate is \"1 money = v bananas\" in period 1 (note: the 1) here may be di'erent than the 1) you solved for in question 3). According to the quantity theory of money in question 4, in period t=2, central bank doubles money supply from 4 to 8, what do you think will be the exchange rate in period 2? Period 1: 1 money = 11 bananas Period 2: 1 money 2 bananas 2. Given these exchange rates in period 1 and period 2, write down gen 1's optimization problem. In other words, suppose gen 1 buys m units of money when they are young, and sell the m units of money when they are old. What are the equations for Gy and co? gen 1: maxcyca stay = CO = 3. Solve the above problem, and nd an expression for m. 4. What is the equilibrium exchange rate 1; equal to
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