Look at Figure IV-3 from the Romer handout. Draw an IS-MP diagram for the IS curve and the MP(π1) curve from that figure. To help draw your figure, assume that inflation expectations πe = π1 > 0, and assume that the IS and MP curves intersect at a real interest rate that is above 0. What is the real interest rate that the central bank sets in equilibrium, and what is the real interest rate that the central bank would like to set if there was no zero lower bound constraint? Label these points in your figure and briefly explain your answer (i.e., why are these points the same or not the same?).

b) Look at Figure IV-4 from the Romer handout. Draw an IS-MP diagram for the IS curve and the MP(π2) curve from that figure. To help draw your figure, assume that inflation expectations πe = π2 > 0, and assume that the IS and MP curves intersect at a real interest rate that is below 0. What is the real interest rate that the central bank sets in equilibrium, and what is the real interest rate that the central bank would like to set if there was no zero lower bound constraint? Label these points in your figure and briefly explain your answer.

Don't use plagiarized sources. Get Your Custom Essay on

Real interest rate set by central bank

Just from $13/Page

c) Look at Figure IV-5 from the Romer handout. Draw an IS-MP diagram for the IS curve and the MP(π3) curve from that figure. To help draw your figure, assume that inflation expectations πe = π3 > 0, and assume that the IS and MP curves intersect at a real interest rate that is below 0. What is the real interest rate that the central bank sets in equilibrium, and what is the real interest rate that the central bank would like to set if there was no zero lower bound constraint? Label these points in your figure and briefly explain your answer.

NOTE: PLEASE ANSWER ALL SUBSECTIONS AND GRAPHING QUESTIONS. PICTURES OF FIGURES ATTACHED. THANK YOU!

The price is based on these factors:

Academic level

Number of pages

Urgency

Basic features

- Free title page and bibliography
- Unlimited revisions
- Plagiarism-free guarantee
- Money-back guarantee
- 24/7 support

On-demand options

- Writer’s samples
- Part-by-part delivery
- Overnight delivery
- Copies of used sources
- Expert Proofreading

Paper format

- 275 words per page
- 12 pt Arial/Times New Roman
- Double line spacing
- Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Delivering a high-quality product at a reasonable price is not enough anymore.

That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more