1. Suppose that the government wants to raise investment but keep output constant. In the IS-LM model, what mix of monetary and fiscal policy will achieve this goal? How will the effects of this policy show up in the AD-AS model? In the 1980s, the U.S. government cut taxes and ran a budget deficit while the Fed pursued tight monetary policy. What effect should this policy mix have? Note that the above (second) policy mix has no effect on the LRAS curve in the static (AD-AS) model. Explain how these policies would affect the growth of output using a dynamic model. Explain how the different assumptions made in the long run static model versus the long run dynamic (neoclassical growth) model account for their different results for real output