You are an economist for the nation of Blueland, which is currently an unemployment rate of 5% and an inflation rate of 2%. The natural rate of unemployment in Blueland is 4%. a.) Draw a correctly-labeled model which shows Blueland's current economic equilibrium. 4 pts.

b.) Using an ample reserves model for Blueland, what will the Federal Reserve do to bring the economy back to long-run equilibrium? 3 pts.