Section 3: AS/AD model (30 points) In 2024, the U.S. economy is struggling. Unemployment has jumped. Trouble began in January 2023, with a spike in oil prices, generated by terrorist bombing of important production fields in Saudi Arabia. In January 2024, a second blow hits the economy, when households become much more risk averse, as they panic about corporations' high debt levels. The table below provides an incomplete list of macro data. Note: Inflation expectations are derived from the treasury 10-year TIPS spread. The Government borrows virtually all of its funds by issuing 10-year treasury notes. Crude oil price ($/bbl) Unemployment Consumer Price Index (CPI), year-on-year, % change CPI: index level CPI, excluding oil, year-on-year, % change Real U.S. output: index level Federal Government spending Federal taxes collected corporate borrowing level Corporate/Government bond spread 10-year Government bond yield 10-year yield minus TIPS yield 2022:04 2023:04 2024:Q4 $50 4% 5% 6% 2.0% 4.8% -1.1% 100 2.00% 1.37 5%. 100 98 96 $2.0 trillion $2.2 trillion $2.5 trillion $1.7 trillion $1.3 trillion $1.2 trillion $200 billion 2.00% 2.00% 4.00% 2.50% 2.00% 2.50% 2.00% Key values: LTSG = 2.5% U* = 4% TT* = 2% oil = 10% of CPI Phillips curve a = 0.5 1. Assume a standard Phillips curve successfully predicts the CPI: ex-oil. Based upon the information given in the tables above, compute the CPI: ex-oil, for Q4:2023 and 24:2024 (show your work) (2 points)