Lg} biuppose there is an Increase in 11. {Show how this attracts the equilibrium real interest rate. Explain the economic intuition for this. [13] Now let's tell a story. Romenlher we are thinking about this one good as fruit. Let's say that meteorologists in period t anticipate a hurricane 267 in i + 1 that will wipe out most of the fruit in t + 1. How is this forecast going to be reected in rt? Show this in your IS - Y' graph and explain the economic intuition. [i] Generalizing your answer ron1 the last question, what might the equi- librium interest rate tell you about the expectations of Ym relative to K