$2$B$.($Econ $235)$ Answer all of the following parts completely. Be specific.a$)$ Does the Federal Reserve $($Fed$)$ actually control interest rates? If so$,$ to what extent?b$)$ What is the short$-$run impact of an expansionary monetary policy on interest rates? What is this effect called, and why does it occur? Depict this short$-$run impact on a diagram of the loanable$-$funds market. Assume you are starting with a constant money stock and that the Fed engages in a one$-$shot increase in the money stock.After the new money circulates throughout the economy, what happens to interest rates? What is this effect called, and why does it occur? Depict this impact on a diagram of the loanable$-$fundsd$)$ Now assume that the Fed continues expanding the money stock at a constant rate. What is the impact on nominal interest rates? What is the impact on real interest rates? What is this effect called, and why does it occur? $($You do not need to graph it$.)$e$)$Why does the difference between short$-$term and long$-$term effects of monetary policy that you have described in parts $($b$),($c$,)$ and $($d$)$ create problems for a monetary policy that targets interestGive the equation for the Taylor Rule. Clearly identify all variables and coefficients in the equation. What macroeconomic variables does the Taylor Rule try to stabilize? How does the Taylor Rule deal with the problems you described in part $($e$)?$