4. [Total points: 6] a) Derive the slopes of Phillip's curve (PC, thereafter) and the Monetary Rule (MR, henceforth) curve. What economic implication do you get from these slopes of these two curves? (1 + 1+ 1+ 1 = 4 points) b) Consider the utility loss function of the central bank; where it only cares about reducing the output gap. Now, due to the ongoing pandemic, economy is going through the recession along with the disinflation. In a graph consisting the utility loss function of CB, show how CB will accommodate the recession? (2 points) 5. [Total points: 10] a) Think about the great financial crisis (GFC) in late 2000s. i) According to you what kind of shock it was - AD/AS? (1 point) ii) With 3-equation model (IS-PC-MR) explain the consequences of the crisis on worldwide output, unemployment, and inflation. Make sure to draw the graphs (IS, WS-PS, MR-PC) to explain the scenario. (3 points) iii) In the above diagram, show the optimal response of the Central Bank to deal with such recession. (2 points) iv) Mention whether the shock is permanent or temporary. (1 point) b) Do you think the crisis leads the world economy into deflation trap? With the reference of your previous diagrams, explain your answer properly. (3 points)