The following graph plots equilibrium in the money market at an interest rate of 1, 5%% and a quantity of money equal to $45 billion, Show the impact of the increase in government purchases on the interest rate by shifting one or both of the curves on the following graph. Money supply Money Demand Money Supply INTEREST RATE Money Demand MONEY (Billions of dollar)Suppose that for every increase in the interest rate of one percentage point, the level of investment spending declines by $1 billion. Based on the changes made to the money market in the previous scenario, the new interest rate causes the level of investment spending to ! by Taking the multiplier effect into account, the change In investment spending will cause the quantity of output demanded to by at every price level. The impact of an increase in government purchases on the interest rate and the level of investment spending is known as the "effect. Use the purple line (diamond symbol) on the graph of the beginning of this problem to show the aggregate demand curve (AD,) after accounting for the impact of the increase in government purchases on the interest rate and the level of investment spending. Hint: Be sure your final aggregate demand curve (A.D;) is parallel to AD, and A.D.. You can see the slopes of AD, and AD. by selecting them on the graphSuppose there is some hypothetical economy in which households spend $0:50 of each additional dollar they cam and save the $0.50 they have left over The following graph plots the economy's initial aggregate demand curve ( AP,1. Suppose now that the government increases its purchases by $2 billion. Use the green line (tangle symbol) on the following graph to show the aggregate demand curve (AD.) after the multipher effect takes place. Hint: be sure the new aggregate demand curve (A.D.) is parallel to A.D.. You can see the slope of /.D, by selecting it on the following graph AD 110 AD PRICE LEVEL 10 12 114 OUTPUT (Bilions of dollars)