Suppose in the real business cycle model that there is a temporary increase in both current government spending and in current total factor productivity, simultaneously. Draw diagrams for the labour, goods and money market, and the production function. Determine the equilibrium effects of these two shocks occurring simultaneously on employment, output, consumption, investment, money, real wages, the real interest rate, and the price level. Provide a detailed economic analysis explaining your results with the aid of the diagrams. 2. Suppose in the New Keynesian open-economy model the world interest rate is below that which would equate output demanded with output supplied. Suppose that there is a decrease in the current money supply. (a) Assume that the exchange rate is flexible. Draw diagrams for the labour, goods and money market, and the production function. Determine the equilibrium effects of this decrease in the current money supply on employment, output, consumption, investment, money, real wages, the real interest rate, the price level and the exchange rate. Provide a detailed economic analysis explaining your results with the aid of the diagrams. (b) Repeat part (a) for the case of a fixed exchange rate.