Assume that the United States begins deficit spending to fund new social welfare programs.

a. Using a correctly labeled loans me funds graph, show and explain the impact of the new spending on real interest rates in the United States.

b. Explain their impact of the change in interest rates you identified in part (A) on each of the following:

i. Capital investment

ii. Long-term economic growth

iii. The international value of the U.S. dollar