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Heo, I would like the answers to part a and b please. Greatly appreciate, thanks!!! PART B: Do all questions for 30 points. QUESTION 2:

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Heo, I would like the answers to part a and b please. Greatly appreciate, thanks!!!

image text in transcribed
PART B: Do all questions for 30 points. QUESTION 2: Briefly describe your understanding of the nature and significance of constrained discretion. 10 points). QUESTION 3. Describe the Monetary Policy Curve and assume that it is given by the expression: r=15+0.75n In which r = real rate interest; and = 1s the rate of inflation. (a). Calculate the values of the real interest rate when the inflation rate is 2%, 3%, 4% and 6%; draw the graph of the MP curve associated with your answers. (b). Assume now that the Monetary Policy Curve is r = 2.5 + 0.757; Does the new MP curve represent an autonomous tightening or loosening of monetary policy? Calculate the values of the real interest rate when the inflation rate is 2%, 3%, 4% and 6% and draw the new MP curve showing the shift from your answer in question (a) above. (c). What is the major significance of the monetary policy curve? (20 points)

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