The following economic model has: an IS equation: a Phillips curve: -a(iP+p--r) + v, = + Y+s, and a Taylor rule for policy (as long as the implied policy rate is greater than or equal to zero): iP = n +F-p+h(n-n*) + b where is deviations of output from steady state, it is the nominal policy interest rate, is inflation, is expected inflation, * is target inflation, v and s are shocks to the system and the other terms are positive constants. a. Explain the standard assumptions underlying the model. b. Explain the Taylor rule and the trade-offs faced in the choice of parameters and b.