Question 27 (15 points) Saved Suppose a pandemic leads to a large increase in unemployment, a significant decrease in GDP growth, and a small drop in inflation. The FOMC responds to this scenario by conducting open market purchases and lowering their policy rates (discount rate, interest on reserves). Using the models of the multiplier, the labor market, and the Phillips curve taught in this class, explain how the change in Fed policy would affect the economy. Assume interest rates are not close to the zero lower bound