4. We have discussed the liquidity effect many times. A key assumption to observe the liquidity effect is that expected inflation, income and prices are fixed. If this assumption doesn't hold, an increase in the money supply may have the impact of increasing the nominal interest rate. We also know that interest rates are pro-cyclical - rising during expansions and falling in contractions. Suppose that the FRS observes rising nominal interest rates, which it interprets as tight credit. If there is no liquidity effect, will this result in pro-cyclical or countercyclical monetary policy