Consider the AS-AD model discussed in the course. Assume that the interest rate only affects investment, not net exports. The AS and AD curves are given by a. ii\" =aB0TE7T) nt=1rt_1+th+a What must be true of the model parameters and variables in the long-run equilibrium, i.e. in the steady state? Motivate your answer. (6 points) Analyse the effects of a negative demand shock. Describe the mechanisms that bring the economy to long-run equilibrium. (8 points) Explain how the AS and AD curves are affected if we allow for a mechanism whereby the interest rate affects the exchange rate. No derivations are needed. (6 points) Use the AS curve and Okun's law to derive a Phillips curve in terms of ination and unemployment. (5 points)