Consider the following model of monetary policy. There is an economy consists of a government and a private sector. The government views the following the welfare loss function: E [T' + X (10 - 1)? ], where ro is the socially optimal employment rate, > > 0 is a parameter, and the expectation is taken over aggregate shocks. Moreover, " is the (actual) inflation rate and a the (actual) employment rate, where the latter is given by where r*