Question 5A (7 points) Starting from a baseline Long Run Steady State Equilibrium (LRSSE), the federal reserve increases interest rates. I What kind of policy is this (Monetary or fiscal ; expansionary or contractionary? How do you know? I As a response which curve will start shifting in which direction? Why? I How will this policy make the economy move away from the baseline Long Run Steady State Equilibrium (how would it change unemployment or price level relative to the long run steady state equilibrium )? IV Draw a graph to show the changes to the long run steady state equilibrium (LRSSE). L Draw a graph to show how the economy can come back to a long run steady state equilibrium in this case without any intervention. Explain the self correction process. VI Even though self correction is possible in this case, why would it not be followed? VI Draw a graph to show how the economy can come back to a long run steady state equilibrium in this case with intervention. Explain the demand management policies that you will recommend in this case. YTt What are the biggest problem of conducting demand management policies in this situation