]Show the graph and please explain it

Consider the full short-run model (IS-MP-PC). You need to draw a diagram and answer the questions below. The IS-MP-PC Model is a 2-part diagram. The top part contains the IS and MP curves. The bottom part contains the PC curve. In both cases the horizontal axis measures SRO (short-run output). Begin by depicting the initial equilibrium (year 0). That is, draw the diagram corresponding to a situation where there are no AD shocks (a=0), the Fed sets the real interest rate equal to the MPK (r), and there are no inflation shocks (o=0). Suppose also that the initial inflation rate is 4%, which corresponds to the Fed's target inflation rate. Label the initial equilibrium as point A in the diagram, both in the top and bottom parts of the diagram. Which of the statements below is correct regarding year 0? At the initial equilibrium, SRO will be zero and the inflation rate will be stable at 4%. At the initial equilibrium, the real interest rate will be equal to the MPK and the inflation rate will be stable at 0%. O At the initial equilibrium, SRO will be zero and the inflation rate will be stable at 2%. At the initial equilibrium, both SRO and the real interest rate will be equal to zero. In year 1, a new administration announces that publicly traded companies are no longer required to make public their financial information. As a result, there is an increase in the uncertainty about the creditworthiness of all major companies that is reflected in a sharp increase in the spreads of corporate bonds relative to government bonds. Assuming the Fed keeps the interest rate unchanged, think about which curves need to shift in the IS-MP-PC diagram. Update the diagram and label the new equilibrium as point B (in top and bottom diagram). Which of the statements below is correct? Borrowing costs increase and the IS curve shifts to the left. The economy experiences an inflation shock and the PC curve shifts up. Borrowing costs increase and the MP curve shifts up. The economy experiences an inflation shock and we move up along the PC curve