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.

c). What will happen to the nominal interest rate and the price of bonds if the federal reserve decides to lower the reserve requirement using a limited reserves model for Blueland? 2 pts.

d.) Based on your answer to part c, what will happen to Blueland's exports ? 2 pts. Explain. 4 pts.

e.) Draw a Loanable Funds Market showing the effect of part c on firms' borrowing. 4 pts.

f.) Based on your answer to part e, what will happen to Blueland's Aggregate Demand? 1 pt. Explain. 1 pt.

g.) Based on your answer to part c and part f, what will happen to Blueland's real interest rate? 2 pts. Explain. 4 pts.