1. (20' points) Some researchers have considered the possibility that government spending shocksreecting events such as warscould be a source of business cycles. Suppose that government spending temporarily increases: G increases but G\" is unchanged. (a) (12 points} Using the real business cycle model we developed in class, show graph- ically how the increase in G would affect output, employment, real wages, the real interest rate and the price level. What happens to consumption and investment? (b) (6 points} Using your answer from part (a), are the variables below procyclical, countercyclical or acyclical'? Complete the table below. Variable Data Model Consumption Procyclical Investment Procyclical Price Level Acyclical Employment Procyclical Real Wage Procyclical Average Labour Productivity Procyclical (c) (2 points) Using your answer from part (b), are government spending shocks (alone) a plausible source of business cycles