1. Derive the Marginal Revenue (MR) curve:-

a.What is the Central Bank loss function?

b.Illustrate the preferences of an unemployment averse Central Bank in a picture.

c.By considering multiple Phillip Curve derive the Marginal Revenue (MR) curve for the case of an unemployment averse Central Bank.

d.Suppose the Phillip Curve becomes steeper. Re-derive the Marginal Revenue (MR) in this case following steps . Will the MR be steeper or flatter in this case? Provide some intuition for this.