Question 2. (6 points each) Suppose the money demand lnction is given by 1 M\" Y5 P 1 (1 + 1')? (1) What is the money demand elasticity of the price level P? (2) What is the money demand elasticity of income Y? (3) What is the money demand (semi) elasticity of the nominal interest rate i? Hint: Notice that the semi-elasticity is the percent change in money demand when the nominal interest rate changes by 1 percentage point (i.e. At). In the following questions, from this year to next year, assume the growth rate of income is 2% and the percentage change in the nominal interest rate is 0 and income and the nominal interest rate are not affected by nominal money supply. (4) If you want to target a 2% ination rate, what should be the growth rate of nominal money supply? (5) Instead, if you want to target a 5% ination rate, what should be the growth rate of nominal money supply? From this question (5) and (4), what can you say about the relationship between the growth rate of nominal money supply and the ination rate? If the ination rate is high, what does it imply about the growth rate of nominal money supply? (Max 10 sentences)