In the rest of this question you will be asked to analyze the effect on GDP of a temporary demand versus a permanent supply shock. Their different effects are important to understanding what happens to the economy over the cycle. c] Assume that the economy is in equilibrium at the values of Y and r that you found in part b]. From this position, suppose that there is a negative shock to investment that has no effect on potential output. In particular, assume that the constant term in that equation declines from 36.25 to 33.?5. Find the short-run d] 6] level of output [1'] as well as the level of the real interest rate. If over time, neither monetary nor scal policy responded, how would the economy get back to equilibrium? In particular, what would be the new long-run levels of Y, C, l and the real rate of interest [r]? Has the level of investment been restored to its original level? If it has not, explain why. Go back to the original investment equation [i.e., the constant term is again 36.25] but assume that the short-run level of output that you found in part c] is now the new long-run level of output. This new, lower level of Y is the result of a permanent shock to potential output: a supply shock. You can think of the level of output you found in part b] as a short-run equilibrium position. Find the new long-run equilibrium levels of P as well as C" and 1". Discuss carefully but briey how the economy gets to this new equilibrium. Discuss briey why these values are different than those you found in part c]