3. (4 points) In the short-run of the economy, suppose both the Fed and ECB use the Taylor rule to set interest rates. What happens to the US/Euro exchange rate e(t), number of dollars per euro, today (time t) if: a. Today (time t) it is announced that inflation in USA increases ? b. It is announced today that the European GDP growth rate remained flat at time t, as expected, but it is also announced that its GDP growth will increase at t+1? Justify your answer and give clear explanations on the models/assumptions you rely on