Consider the IS curve 1, =4-20r_, where y is output and r is the real interest rate. In period 0 output is y, =3. Suppose that in period 0 the economy experiences deflation (i.e., the period 0 inflation rate is negative). Can the Central Bank set the period 0 nominal interest rate so that period 1 output (y, ) is 10% higher compared to yo, despite a negative inflation rate? Show and explain, assuming that agents form adaptive expectations. [50 marks]