In the real business cycle model, suppose the government spending increases temporarily. 1. Determine the effect on labour market, holding the interest rate constant?I [5 pts] 2. Explain what impact this temporary increase in goven'tment spending has in the goods market, holding the interest rate constant? Illustrate with graphs. [ll] pts] 3. Suppose that the interest rate increases in response to this temporary increase in government spending. How will it affect the labour market and the goods market? Illustrate with graphs. [5 pts] 4. Argue that the price level could go up or down. Specify the conditions under which the price level goes up. Illustrate graphically. | pts] 5. Determine whether investment and average labor productivity increases or decreases. [2 pts] 6. Are these predictions consistent with the business cycle facts? {Draw a table) |7 pts]