Suppose a government moves to reduce a budget deficit. Using the long-run model of the economy, graphically illustrate the impact of reducing a government's budget deficit by reducing the governments purchases. What happens to Public savings? Private savings? National Savings? Please label the axes: the curves; the initial equilibrium values; the direction curves shift and the terminal equilibrium values. Explain what happens and which curve shifts and why. State in words what happens to the real interest rate, national saving, investment, consumption; and output