Check my w The graphs below shows the information for the economy of Heart a. In graph A, illustrate the effect of an increase in money supply, which reduces the interest rate to 1 percent, and in graph B. the effect of the lower interest rate on the level of investment spending Plot only the endpoints of line MS2 in graph A. Then plot the new equilibrium in Graph 8, plot the new equilibrium. 0 MD MS Tools -9 7 MS2 New equilibriu 6 5 Rate of interest 4 3 2 Next B Tools 8 -- New equilibriu ON Rate of interest N 0 50 100 150 200 250 300 350 4 DIE Next b. What is the new level of investment spending? $ c Suppose that for each $1 change in investment, aggregate demand changes by $2. Show the effect of this change in investment spending in graph C. Plot only the endpoints of line AD2 AS AD Tools / AD 3 Price level 100 200 300 006 500 OOL 800 900 , 2000 100 Next