Question: Please help with these two questions With explanations! 3. Using the IS/MP model, show the effect of an increase in financial frictions. How should the

Please help with these two questions With explanations!

3. Using the IS/MP model, show the effect of an increase in financial frictions. How should the Fed respond to an increase in financial frictions? Is this always effective? 4. Using the IS/MP model, show the effect of deflation. Describe how a deflationary spiral can occur

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