a) Recently, shelter-in-place and other social distancing policies were put in place in response to COVID-19, causing a cut in consumption on travel and leisure.Using the aggregate demand - inflation adjustment (AD-IA) model, show theshort-runimpact these policies had on GDP.Include a carefully labeled AD-IA diagram, and briefly explain in words what is included in the AD curve.

b) Real GDP in the US in 2019 was equal to potential GDP and the actual federal budget deficit was $1 trillion.Was thestructuralbudget inbalance,surplus, ordeficitin 2019?Briefly explain your answer in words and illustrate with a diagram plottingreal GDPon the x-axis andtax revenues minus expenditureson the y-axis.