Consider two different versions of the basic neoclassical model. In one, the MPC is relatively large, in the other, the MPC is relatively small. (a) Show how a higher or lower value of the MPC affects the slope of the IS curve. (b) Suppose that there is an increase in At+1. Show graphically how this impacts equilibrium rt in the two cases considered in this problem - one in which the MPC is relatively large, and one in which the MPC is relatively small