2.Assume that the current interest rate is 2.0% and the economy is in a mild recession somewhat below Y_N.Using the model of Liquidity Preference, illustrate with a graph and short explanation how that equilibrium rate of 2.0% is determined.Now, assume the next move by the Fed is toraisethe target rate of interest by one-quarter percent (0.25%) out of a fear of future inflation.Illustrate this contractionary monetary policy graphically, first through liquidity preference, and then via IS-LM.Could this contractionary move by the Fed result in full employment?Why or why not?