Problem 2. Use the IS-MP framework to answer the following questions. Assume that the economy starts in period 0 in the no-shock long-run equilibrium, in which a = 0, R = = 3%, and Y - 0. Assume that the sensitivity coefficient in the IS curve is b - 2. Be sure to draw the relevant IS-MP diagrams for each of your answers below. 1. An investment tax credit raises aggregate demand by 2 percentage points in period 1. What should be the monetary policy response to this shock if the Fed wants to maintain zero short-run output? Examine this case using the standard IS-MP framework and calculate the real interest rate in period 1. 2. Now assume that, in response to the shock from part 1, the Fed raises the real interest rate to 5%. Find the value of short-run output in period 1. 3. Suppose that investment demand is less sensitive to changes in the real interest rate that is, b