Part II (15 points) 1. Refer to the following diagram and answer: Exchange r310. E Y2 Y' Output. Y 0 Initial situation: point 1 o The shock: Consumers suffer a sudden loss of optimism and cutback on spending. 0 Questions a. Discuss which schedule shifts in which direction. b. How will Y, E, and CA change as a result? 0. The government wants to maintain full employment using scal policy. Discuss what it will do and its effects on DDAA schedules and on E, Y, and CA