Answer the following below:

1.

Which of the following ideas describes a situation where the Federal Reserve faces reduced ability to stimulate short-run economic activity? 1.) Zero lower bound 2.) The Taylor rule 3.) Monetary neutrality 4.) Money multiplier Starting with a recessionary gap, draw the liquidity preference model and the AD/AS model before and after the Fed enacts the proper amount of expansionary monetary policy to close the recessionary gap. Label all curves, shifts, the recessionary gap, and equilibria. Consider including that third graph in order to think about investment