Q1 The state and federal governments are spending on advertising campaigns encouraging domestic tourism. Carefully explain the effect of this spending by the governments on the equilibrium GDP in the Keynesian income-expenditure model. In your answer, carefully show the new equilibrium and explain the adjustment to the new equilibrium.

Q2 . "Whenever currency is deposited in a bank, cash goes out of circulation and, as a result, the supply of money is reduced." Explain, in detail, whether you agree or disagree with this statement.