Q4 (30 points) Shift in AD curve due to Covid19 Suppose, under the threat of Covid-19, consumers and investorsincluding both business firms and financial-market participantshave all become pessimistic about the future of the economy. (:1) Explain how such loss of confidence would affect each of the following curves. Supply of loanable funds (:9? 5) Demand for loanable funds (9 d) Supply of real balances (m5) 0 O O o Demand for real balances (md) (b) Explain how the possible changes in part (a) above would create a discrepancy in the interest rates between the loanable-funds market and the money market (i.e., rm\"t vs. rmmy). (c) Explain how to eliminate such interest-rate gap via EITHER an adjustment in the price level (i.e., P-adjustment) 0R an adjustment in real output (i.e., yd-adjustment). (d) Conclude how aggregate demand (AD) would respond to this confidence crisis