1. Consider the Aggregate Demand-Aggregate Supply framework, where initially the economy is at short and long run equilibrium. Suppose government spending is reduced. You can assume for simplicity expected inflation is always zero. 1.1 Show what happens in an IS-LM and AD-AS graph in the period the government spending reduction occurs.1.2 Show what happens over time to output, the price level, and the interest rate. 1.3 Repeat 1.1 and 1.2, assuming potential GDP falls by the same amount the AD curve shifts