Question: Kindly assist with home work Question 4 {5 marks] Given that the price is the weighted average between the expected price level and the wage

Kindly assist with home work

Kindly assist with home work Question 4 {5 marks] Given that the

Question 4 {5 marks] Given that the price is the weighted average between the expected price level and the wage rate: as in the following equation: F: = #31:\" + {1 Mm: Assuming rational expectations and that the wage rate follows an autoregressive process of order one {ARE : wt 2 Barbi + a: ; where c is a random error term; Derive an expression forthe expected wage rate in anyr period j. [5 marks)

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