Instructions: Enter your answer as a whole number. If you are entering a negative number include a minus sign. a. How much does aggregate demand need to change to restore the economy to its longrun equilibrium? $|:| billion b. lfthe MPC is 0.9, how much does government purchases need to change to shift aggregate demand by the amourlt you found in part a? $ |:| billion Suppose instead that the MPC is 0.8. c. How much does aggregate demand and government purchases need to change to restore the economyto its longrun equilibrium? Aggregate demand needs to change by 5- billion and government purchases need to change by $ |:| billion. The graph below depicts an economy where an increase in aggregate demand has caused inflation. Assume the government decides to conduct fiscal policy by decreasing government purchases to restore full-employment GDP. Fiscal Policy 180 LRAS AS 160 140 120 100 Price Level 80 60 AD 40 AD 20 0 100 200 300 400 500 600 700 800 900 1000 Real GDP (hillinne of dollars)