If you could answer the following questions that are found in the image that would be great! Thanks.

1. When the economy experiences a shock, the government can choose whether to intervene or not. The economy of Urbania, whose initial macroeconomic conditions are determined by the equations AD: Y=54-6Ir. SRAS: rt=4 Notice that Urbana has a sticky-price SRAS curve. That means that the assumptions of the IS-MP apply. The multiplier in Urbana is 3. The economy starts out in a long run equilibrium. a. What is the initial equilibrium output and ination in this economy? What is its Long Run Aggregate Supply curve? Now, Urbanian rms become more pessimistic about the future and AD falls to Y = 36 - 61:. b. Given that Urbana experiences this negative AD shock and all else remains the same, what's the new short run equilibrium? If the government decides to immediately close the output gap, what will the new long run equilibrium be? By how much must autonomous government spending E change in order to push the economy into this new long run? Suppose instead that the Urbanian government decided NOT to respond to the AD shock. What would the new long run equilibrium be? In one set of axes, draw a graph that represents i) the initial equilibrium, ii) the AD shock, iii) the LR equilibrium WITH government intervention, and iv) the LR equilibrium W] l HOUT government intervention. Which outcome is better, with or without intervention? Now return to the initial equilibrium. This time, suppose there is an SRAS shock, so that SRAS becomes 1: = 'i', while other factors remain equal. 3. What is the new long run equilibrium if the government uses scal policy to close the output gap? What is the new long run equilibrium if the government decides NOT to respond to the SRAS shock? In one set of axes, draw a graph that represents i) the initial equilibrium, ii) the SRAS shock, iii) the LR equilibrium WITH government intervention, and iv) the LR equilibrium WITHOUT government intervention. Which outcome is better, with or without intervention