Consider an economy with an upward-sloping aggregate supply curve given by: Y = Y + (1 - nLe ) Where Y is the full-employment output, It is inflation, and me is producers' expectations of the inflation. A policy-maker wishes to enact monetary policy to achieve a target level of output and inflation given by {Y*, x*}, subject to Y* > Y. 1. [4 points] Write down (do not solve) the policy-maker's objective function if producers expect inflation to be 3% and the policy-maker cares about increasing output twice as much as hitting the inflation target. 2. [5 points] What will happen to output, inflation, and producers' expectations of inflation in this economy if producers set their inflation expectations rationally? Explain your