This is a temporary increase in o(bar) in the Phillips curve: the shock o(bar) becomes positive for one period and then goes back to zero. Explain why this is correct. (b)Using the full IS-MP short-run model, explain what happens to the economy in the absence of any monetary policy action. Be sure to include graphs showing how output and inflation respond over time. (c) Suppose you are in charge of the central bank. What monetary policy action would you take and why?

Explain whether each of the following events increases, decreases, or has no effect on the unemployment rate and the labor-force participation rate. a. after a long search, jon finds a job. b. tyrion, a full-time college student, graduates and is immediately employed. c. after an unsuccessful job search, arya gives up looking and retires. d. daenerys quits her job to become a stay-at-home mom. e. sansa has a birthday, becomes an adult, but has no interest in working. f. jaime has a birthday, becomes an adult, and starts looking for a job. g. cersei dies while enjoying retirement. h. jorah dies working long hours at the office.