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Important: You have to present your solutions to the answers of all questions. The text must be readable and you should write the answer typing (on) machine do not write by hand,type . .I want a good solution to this question with good explanation and nice writing I want you to explain all questions with formulas or that someone needs to show with diagrams as required. textBR/ Question) Macroeconomic stabilization a) Discuss the impact of macroeconomic stabilization for various values of h and b. Illustrate your answer in a diagram.Explain why a supply shock will cause a conflict between the goals of output and inflation stabilization,what does that mean for their choice of b anf h ?Consider now the impact of a negative supply shock (St>0),assuming that Vt=Pt=0, starting from a long-run equilibrium,Eo _ b)Assume now that the central bank react to a positive inflation gap,but not to the output gap (h>0 and b=0 ) Illustrate how the AD curve now shifts and if,and how ,its slope changes.What are the effects on the stabilization ofthe output-and inflation-gap? How do these effects depend on the size of h 9Step by Step Solution
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