(b) (4 points) For each of the shifts in your graphical analysis, briefly state what caused them (that is what was the reason for those shifts). (c) (4 points) Discuss briefly how investment and consumption compare in the old and new short-run equilibrium. That is, what happens to each of these variables due to the decline in the price level? (d) (2 points) What would have been different, if anything, if the central bank fixes interest rates instead of the money supply? Briefly explain.2. Suppose the economy is described by the 13-]..le model. The central bani-I: holds the money supply xed and nominal money demand is given by Md = emu + :11? [so where daydlg 3: I] and P is the price level in the economy. All other standard assumptions hold1 that is U=s+c1{YT] I=hu+b1Ybgt and G is exogenous. [a] {Ill points] Suppose the prise level in the economy decreases. What would happen to the short-run equilibrium? Use the three-gaph method used in class? which shows the money market [in nominal terms}? the goods market and the IS-LM graph. Make sure to properly align movements in Y and 1' between the graphs. Label all axes? curves as well as the old and new equilibrium