Question: Please help solve both parts Question 4: (10 points) Consider the following overlapping generations economy. . In each generation there are 1,000 individuals, that is
Please help solve both parts


Question 4: (10 points) Consider the following overlapping generations economy. . In each generation there are 1,000 individuals, that is N, = 1, 000 young and Nt-1 = 1, 000 old. . The fiat money supply changes according to Mt Mt-1 = z =2 . The initial old own a total of 10;000 units of fiat money (Mo = $10, 000). . Each person is endowed with y = 20 units of the consumption good when born and nothing.when old. . Preferences are such that individuals wish to save 10 units when young at the equilibrium rate of return on fiat money. That is, y - q1 = 10. a) (5 points) What is the rate of return # aut+1 on money in this economy? Recall that money market equilibrium at time t requires Ni(y - c1) = vt Meb) (5 points) What is the value of money vj at time 1? MacBook Pro
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