3. Compare the welfare losses from the two respective cases. Explain the intuition why a government announcement of zero inflation is not credible? 4. What is the parameter that describes the government's attitude toward fighting in- flation? Set up the problem where the government appoints an independent central bank to specialize in fighting inflation. Suppose the central bank is discretionary over policy making. Given aggregate uncertainty, prove that the government, regardless of its own policy stance, will always appoint a more conservative (i.e., tougher in fighting inflation) central bank