Assume the United States is operating below full employment.

a) Identify one monetary policy tool that will solve the problem.

b) Using a correctly drawn and labeled AD/AS graph and money market graph, show and explain how the policy you identified in (a) will affect each of the following in the short-run:

i)output and employment

i)price level

i)interest rates

c)Explain how the policy you identified in (a) will affect each of the following:

i) International value of the dollar

i)American exports (based on the changing value of the dollar)