Define the set of instruments used to estimate the model. Justify the reasons of your selected set of instruments.
Use the data provided to answerALLthe questionsbelow.Q1. Plot the time series of all the variables. Describe and discuss dynamics of the data. How does money supply dynamics compare to the other three variables? [5 Marks]Q2. Estimate thestatic demand for money equation below:πππ‘=π½0+π½1ππππ‘+π½2ππ¦π‘+π½3π‘ππππππ‘ππ‘+π’π‘(1)where:πππ‘isnatural log of real money supply, ππ¦π‘is the natural logarithm of real gdp, π’π‘is […]