Basic information: The economy of Colombia is characterized by the following relations. An IS Curve Yt = a - b(Rt - T) A Fisher equation: Rt = it + ft - Ett+1 A monetary policy rule: it = r + m(t - 7) + Ett+1 A Phillips curve: It = Et-17it + vYt An assumption for inflation expectations: Et-1 7it = Tit-1 Where ft is a shock to interest rate spreads. ft takes positive values when banks are having financial distress in their balance sheets. Research economists at the central bank of Colombia have determined that 7 = 3%, T = 2%, v =1, b = 1, m = 2, where the notation is the same as in class. The economy of Colombia has been in the long-run equilibrium for as long as you can imagine. The chairman of the Central Bank asks you to estimate the value of short-run output, inflation, real interest rates, and nominal interest rates in the long-run equilibrium.The economy of Colombia has been in the long-run equilibrium for as long as you can imagine. The chairman of the Central Bank asks you to estimate the value of short-run output, inflation, real interest rates, and nominal interest rates in the long-run equilibrium. O Y = 0, nt = 2%, Rt = 2%, it = 2% O Yt = 0, nt = 2%, Rt = 2%, it = 4% O Yt = 0, mt = 3%, Rt = 2%, it = 5% O Yt = 0, nt = 3%, Rt = 2%, it = 2% O All the options are incorrectBasic information: The economy of Colombia is characterized by the following relations. AnlSCurveY; = a b(R; 7) A Fisher equation: Ry = iy + f; By A monetary policy rule: ; = 7 + m(?rt fr} + Eimeg A Phillips curve: m; = E;_1m; + vY; An assumption for inflation expectations: F;_ 17 = mp_1 Where f; is a shock to interest rate spreads. f; takes positive values when banks are having financial distress in their balance sheets. Research economists at the central bank of Colombia have determined that 7=3%,7 =2%,v=1,b=1,m = 2, where the notation is the same as in class. Please choose the right Aggregate Demand Curve. Where ft is a shock to interest rate spreads. ft takes positive values when banks are having financial distress in their balance sheets. Research economists at the central bank of Colombia have determined that 7 = 3%, T = 2%, v = 1, b = 1, m = 2, where the notation is the same as in class. Please choose the right Aggregate Demand Curve. O Y. = a - bm(mt - 7) - bmft O Y+ = a - bm(nt - ) - bft O Yt = a - bm(mt - 7) + bft O Yt = a - bm(nt - 7) + bmft O All the options are incorrect O Yt = a - bm(t - 7)face financial trouble, so f2025 = 0.01. What is the equilibrium level of short-run output in Colombia in 2025? O -1% O 0% O -0.75% O -0.66% O 0.25% O 0.33% O 0.75% O 0.5% O -0.5% O -0.25% O 0.66% O -0.33%Basic information: The economy of Colombia is characterized by the following relations. AnlS Curve Y, =@ b(R; ) A Fisher equation: Ry = i3 + f; E3 w41 A monetary policy rule: i, = 7 + m(m T) + Eyms A Phillips curve: m; = E;_1m + vY5 An assumption for inflation expectations: F;_ 1 = 1 Where f; is a shock to interest rate spreads. f; takes positive values when banks are having financial distress in their balance sheets. Research economists at the central bank of Colombia have determined that 7 =3%,7 =2%,v =1,b = 1,m = 2, where the notation is the same as in class. After being in the long-run equilibrium, in the year 2025, the economy of Colombia did not experience any changes to @, or to the parameters of the model, but the banks of Colombia face financial trouble, so fap05 = 0.01. What is the equilibrium level of short-run output in Colombia in 20257