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Hello, I need help with this question Assume that there no surprises, with all economic agents and the central bank having full information about shocks

Hello, I need help with this question

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Assume that there no surprises, with all economic agents and the central bank having full information about shocks that are hitting the economy. 1. Suppose there is a temporary decrease in TFP. Determine with the aid of diagrams the effects of this on aggregate variables? What should the central bank do in response, if it adopts a price level target? Explain. [20 pts] 2. Now, suppose that instead of a price level target, the central bank adopts a nominal GDP target. What should central bank do ? [10 pts]

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