1. Scenario Analysis (A): Assume the government undertakes an interevention/action to reduce household poverty that results in an increase in net government spending (expansionary fiscal policy). Illustrate the potential impact under (a) Classical assumption (b) Keynesian assumption using the AD-AS model.

For the diagram:. Label the initial equilibrium as (point) A and label your hypothesised outcome of the interevention/action as (point) B

2. Scenario Analysis (B): Consider the current inflationary problems experienced in the nation. Using the Phillips curve, illustrate and provide a rationale of the potential impact (consequences) of the policy intervention/action of Expanding the Earned Income Tax Credit (EITC)

For the diagram: Label the initial equilibrium as (point) A and label your hypothesised outcome of the interevention/action as (point) B.