Question: Hello, I would like the answer to this question please. Question IV [20 points] Consider an economy in which the representative consumer preferences are described
Hello, I would like the answer to this question please.

Question IV [20 points] Consider an economy in which the representative consumer preferences are described by U(C, 1) = 3/512/5 The total number of hours available to the representative consumer is h = 1, and the market real wage is w. The representative firm produces the final consumption good using the technology function Y - NI/2, where N is the labour. Additionally, assume that the government in this economy wants to spend G=0.25. 3 1. Is N = 05 the equilibrium employment? Explain. [05 points] 2. Is w = 1.5 the equilibrium wage rate? Explain [05 points] 3. Solve for the equilibrium (N*, w*). [10 points]
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