Find the long-run values for it, Rt, Y , t using the values of the exogenous variables and parameters shown below. The solution should take the form of a numerical value for each variable.

et = 0 t = 0 ac = 0.6, ai = 0.3, ag = 0.1 = 0.1 mc = 0.3 r = 0.02 bi = 1, bc = 1 m = 2 = 1 Then Find the equilibrium level of short-run output and inflation when central bank announces a decrease in the inflation target to = 0.02. . The answer should be two numerical responses, one for each of the two variables.