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(d) (10 points) Suppose in period t, that the public have rational expectations, and that A = 2, 0 = 1.5, yn = 2, and

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(d) (10 points) Suppose in period t, that the public have rational expectations, and that A = 2, 0 = 1.5, yn = 2, and 6, = 0. What are the equilibrium rates of output and inflation under a rational expectations equilibrium? (e) (10 points) Suppose the central bank is bound by rules, and their objective function is given by UR = (3 2 and the function for output is the same as in Equation 2, and 1 = 2, a = 1.5, Un = 2, and 6 = 0 (as before). What are the equilibrium rates of output and inflation under a rules-based system

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