With the following information, solve this question based on the overlapping generations model.

8. (6 marks) Consider the following OLG economy with A individuals in each gen- eration. Individuals are endowed with y units of the consumption good when young and nothing when old. Fiat money is supplied by the government. The initial old are endowed with Mo units of money. The growth rate of the money supply is & where Me = =Mt-1 and z >1. Newly printed money is used to finance government spending. Preferences are such that individuals would like to consume in both periods of life and young individuals also value government spending. That is, "(C1,t, (2.+1, 9:) = In(c1, + 9:) + Inc2+1, where gt is the amount of government spending per young individual in real terms and of