Events of the Past 18 Months: Total Spending has steadily declined by about $500 billion or 2.5% of GDP during the past year, much if it Consumer declines. Real GDP has decreased steadily and is far below potential GDP (Real GDPF) Unemployment rates have increased well above 6.00% due to many factories laying off workers due to slow sales. Price levels have fallen during the previous year and have stabilized during the past 3 months at a low level for this decade. Currently interest rates are low and not at all responsive to changes in the MI money supply. Leading Indicator Data Stock indices like the DJI and Nasdaq have continued to drop the past 30 days. Orders for new durable goods and finished capital resources have decreased during the past 6 weeks. Retailer inventories have risen due to slow sales for the past 45 days. Construction has been in decline the past 6 months, and Unemployment Insurance applications have increased the past 16 weeks. Consumer confidence has dropped over the past 3 months. a. Demonstrate what has happened during the past 18 months on an AD/AS graph. Construct an MI/MD graph based on current interest rate information. Write a paragraph explaining what is happening and determine if there is a problem in the economy. If there is a problem, clearly state what it is. b. Consider the Leading Indicator Information and determine what it predicts about changes in total spending. Analyze them; determine if Fiscal Policy is appropriate at this time. Write a paragraph explaining why or why not coherently. If Fiscal Policy is not appropriate, explain why it is not appropriate. c. If appropriate, recommend Fiscal Policy to help remedy this situation. Be sure to indicate which mode of Fiscal Policy used, which tools are used and give specifics on method of use; include parts of total spending affected and impact on relevant macroeconomic variables. Show these effects of it on another AD/AS graph. If Fiscal Policy is not appropriate, explain why, and show why on another AD/AS graph. All explanations will be written in a paragraph