Please see the information in the attchment.

I can give only $10. If you want more, please not contract me

Thank you

                                               ECO 320 Money & Banking Homework

                                                            Week 10 Chapter 18

Numerical Exercise 11:

Suppose that the Fed’s inflation target is 2 percent, potential output growth is 3.5 percent, and velocity is a function of how much the interest rate differs from 5 percent:

%∆V = 0.5 x (i – 5)

Suppose that a model of the economy suggests that the real interest rate is determined by the equation:

r = 8.5 – %∆Y

where Y is the level of output, so %∆Y is the growth rate of output. Suppose that people expect the Fed to hit its inflation target.

A. Calculate the optimal money growth rate needed for the Fed to hit its inflation target in the long run.

B. In the short run, if output growth is just 2 percent for two years and the equation determining the real interest rate changes to r = 4.5 – %∆Y, what money growth rate should the Fed aim for to hit its inflation target in that period?

C. If the Fed instead maintained the money growth rate from part a, what is likely to happen to inflation?

D.  Which policy do you think is better in the long short run?  Which is better in the long run?

The dirctions in the attchment. 

(a) For this part of the problem, you can assume we are using the immediate update protocol. We saw that UNDOs have to be done right to left i.e. later writes are undone first and then earlier writes. Give an example to show why it should be done this way by doing the following: i. Find a simple example where it does make a difference whether the UNDOs are done left to right or right to left. ii. Show what the results will be if the UNDOs are done right to left. iii. Show what the results will be if the UNDOs are done left to right. (b) For this part of the problem, you can assume we are using the immediate update protocol We saw that REDOs have to be done left to right i.e. earlier writes are redone first and then later writes. Give an example to show why it should be done this way by doing the following: i. Find a simple example where it does make a difference whether the REDOs are done left to right or right to left. ii. Show what the results will be if the REDOs are done left to right. iii. Show what the results will be if the REDOs are done right to left. (c) Explain why is it that if we are using the immediate update protocol we need to keep the old value (BFIM) of an item along with the new value (AFIM), but if we are using deferred update protocol, we need to only keep the new value. 3. (10 points) Suppose that we use the immediate update protocol for the schedule given in the last slide of the week 5 power point notes. (a) Show what will be the steps taken at the time of the recovery process i.e. specify, in the correct order, what are all the operations (undo and/or redo) which are carried out by showing what changes are made. No additional explanation is needed. (b) What are the final values of A and B; no explanation needed