4. (Jones Ch11 Q1) Suppose the parameters of the IS curve are a = 0 [all a parameters are at their long run value] b = , r =2% [marginal product of capital]. Explain what happens to short-run output in each of the following scenarios (consider each separately). {In case it's not clear, this question needs to be answered with equations and graphs]:

a. The real interest rate rises from 2% to 4%.

b. The real interest rate falls from 2% to 1%.

c. ac increases by 1 percentage points.

d. ag decreases by 2 percentage points.

e. aim decreases by 2 percentage points.