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graph below shows the Fed rule curve and the current equilibrium of an economy in which - P is fixed - MPC=80% => 1/MPS=5 O - planned investment increases $40 whenever interest rate decreases 1% r decreases 1% => Y increases $40x5 8% Fed 4% 2% 2,000 3,000 4,000 (a) Draw the IS curve in the graph above. (b) If government spending G increases $120, G increases $1 => IS curve shifts $5 (i) Draw the new IS curve in the graph above. (ii) What are the interest rate and output at the new equilibrium? (iii) What are the changes in planned investment and changes in output from the current equilibrium to the new equilibrium