Q.5 Suppose we have an economy where rational agents form the rational expectation about the economy. Let yt, mt, pt be the logs of real output, money stock and price level in period t, respectively. We assume the following relations hold: (1)y₁ = mt - Pt (2)yt = y + dpt - Et-1 (pt)) + ut (3)m₁ = m where y is the level of output and u, is a random variable with zero mean and variance. Calculate the reduced forms for y, and pt

The following table shows retail sales in drug stores in billions of dollars in the U.S. for years since 1995. 220- 210- 200- 190- 180- 170- 160- 150 140- 130 120- 110- 100- Year 0 3 90+ 801 6 9 12 15 Let S(t) be the retails sales in billions of dollars in t years since 1995. A linear model for the data is S(t) = 9.44t + 84.182. Retail Sales 85.851 108.426 141.781 169.256 202.297 222.266 3 6 9 12

Please answer this question using the assumptions from the Solow Model In a country, the production function in terms of output per capita, y, and capital per labor, k, is y = k(12) The fraction of output saved, s, is 25% and the depreciation rate, δ, is 0.05. Assume that the population does not grow. What is the steady-state of capital per worker, k*, and output per worker, y*? What happens to the steady-state values if the population growth rate rises to 5%? By how much would the country have to increase its savings rate in b) in order to reach the same levels of steady-state values as in a)? Does the country’s growth rate increase in c) compared to a)? how?

Let A and B represent two variants (alleles) of the DNA at a certain locus on the genome. Assume that 40% of all the alleles in a certain population are type A and 30% are type B. The locus is said to be in Hardy- Weinberg equilibrium if the proportion of organisms that are of type AB is (0.40) (0.30) = 0.12. In a sample of 300 organisms, 42 are of type AB. Can you conclude that this locus is not in Hardy-Weinberg equilibrium?