1. Joe Biden's economic plan calls for increases in income and payroll taxes for those earning wages above $400,000. It has been estimated by the Tax Foundation that his proposed tax policy would increase tax revenue by approximately $2.6 trillion over the next decade. At the same time, he is proposing to increase spending on infrastructure (including roads, bridges, public transportation, the energy grid, and building upgrades) by an additional $2 trillion over the next four years. Recognizing that dollars earned over a decade are less valuable than dollars spent over a shorter time horizon, assume for the sake of this problem that the tax plan will increase taxes by a total of $2 trillion, and spending will increase by a total of $2 trillich over a comparable period. Assuming that these policies are implemented after the U.S. economy has fully recovered from the pandemic, demonstrate graphically both the short run and medium run effects on the economy using the wage setting-price setting model, AS-AD, and IS-LM. Explain carefully why you shifted the curves as you did 2. The International Monetary Fund (IMF) recently predicted that the failure of many small firms would increase market concentration and market power for the remaining large firms. Based on the IMF blog I forwarded to the class on Monday, March 15, demonstrate graphically both the short run and medium run effects on the economy using the wage setting-price setting model, AS-AD, and IS-LM. Explain carefully why you shifted the curves as you did. 1. Joe Biden's economic plan calls for increases in income and payroll taxes for those earning wages above $400,000. It has been estimated by the Tax Foundation that his proposed tax policy would increase tax revenue by approximately $2.6 trillion over the next decade. At the same time, he is proposing to increase spending on infrastructure (including roads, bridges, public transportation, the energy grid, and building upgrades) by an additional $2 trillion over the next four years. Recognizing that dollars earned over a decade are less valuable than dollars spent over a shorter time horizon, assume for the sake of this problem that the tax plan will increase taxes by a total of $2 trillion, and spending will increase by a total of $2 trillich over a comparable period. Assuming that these policies are implemented after the U.S. economy has fully recovered from the pandemic, demonstrate graphically both the short run and medium run effects on the economy using the wage setting-price setting model, AS-AD, and IS-LM. Explain carefully why you shifted the curves as you did 2. The International Monetary Fund (IMF) recently predicted that the failure of many small firms would increase market concentration and market power for the remaining large firms. Based on the IMF blog I forwarded to the class on Monday, March 15, demonstrate graphically both the short run and medium run effects on the economy using the wage setting-price setting model, AS-AD, and IS-LM. Explain carefully why you shifted the curves as you did