More overshooting: Home money supply increases by 5% today, which lowers the short term interest rate from 6 to 2%. Prices are expected to fully adjust to the shock in a year's time, restoring PPP.
1. What is the expected depreciation rate a year from now? (report the percentage base)
2. What is the depreciation rate required by UIP in the short run?
3. Combining your answers to the two questions above, by how much does the exchange rate have to jump up today? (report percentage base)

1. alwaysrain irrigation, inc. would like to determine capacity requirements for the next four years. currently, two production lines are in place for making bronze and plastic sprinklers. three types of sprinklers are available in both bronze and plastic: 90-degree nozzle sprinklers, 180-degree nozzle sprinklers, and 360-degree nozzle sprinklers. management has forecast demand for the next four years as follows: both production lines can produce all the different types of nozzles. the bronze machines needed for the bronze sprinklers require two operators and can produce up to 12,000 sprinklers. the plastic injection molding machine needed for the plastic sprinklers requires four operators and can produce up to 200,000 sprinklers. three bronze machines and only one injection molding machine are available. what are the capacity requirements for the next four years? (assume that there is no learning.)