Long Question 2 of 2: (55 points) Consider the short run model of Chapter 13. The IS curve is given by i7c=-5(Rt-F) (7) where l\": is the short run output, Rt is the real interest rate, F is the longrun interest rate (or the marginal product of capital). The term (1 is the aggregate demand parameter. Also, [3 captures how responsive investment is to changes in the real interest rate. Moreover, the Phillips curve is given by 'ft = th_1 + 1717: + 6 (8) The term 13 captures changes in ination as a response to changes in the current economic conditions, and 6 captures shocks in the supply side of the economy. The monetary authority in this economy wishes to keep ination at a certain \"target\" level fr. Whenever there is discrepancy between current ination and target ination, the central bank responds by changing the interest rat: according to the rule Rt F = ITIOIt fr) (9) where 1?}. is a positive parameter (i.e., I?! > 0) that captures how aggressive the monetary policy is. l of 5) Derive the Aggregate Demand (AD) and Aggregate Supply (AS) curves for this economy. (I 0 pain Is) 2 of 5) Draw the AD and AS curves in the same graph and in the steady state. A steady state is a situation where no supply or demand shocks occur, and ination does not change over time, that is, 11: = ''t_1 for all I. (IOpoims)