Problem 1: Suppose that the Fed has a policy of increasing the money supply when it observes that the economy is in recession. However, suppose that about six months are needed for an increase in the money supply to affect the aggregate demand, which is about the same amount of time needed for rms to review and reset prices. a) What eects will the Fed's policy have on output and price stability? (Hint: Start with the assumption that the economy is in a recession with YSR