The Following graph shows the money market in equilibrium at an interest rate of 1.5% and a quantity of money equal to $30 billion. Show the Impact of the Increase In government purchases on the Interest rate by shII'tIng one or both 01' the curves on the foIIowIng graph. (\"N .0. M1; .30 M E | one u 3' PP?! D 25 ' Money Demand D LIJ 2|) ,_ MoneyEupply ,. E 15 ._+ o: Lu ,. E 10 MoneyDen'Iand I35 I: - - I o in 20 so 4:: so so MON EY {Billions of dolla is}: Suppose that For each one-percentage-point increase in the interest rater the level of investment spending declines by $1 billion. The change in the interest rate [according to the change you made to the money market in the previous scenario] therefore causes the level of investment spending to T by T . After the multiplier effect is accounted for. the change in investment spending will cause the quantity of output demanded to 'I' by 'I' at each price level. The impact of an increase in government purchases on the interest rate and the level of investment spending is l-cnown as the "' eFFect. Use the err'pte IIne deamond symbot} on the graph at the begInnIng of thIs pmbtem to show the aggregate demand curve (ALE) after accountIng for the Impact of the Increase In government purchases on the Interest rate and the Ievet of Investment spendIng. Hint: Be sure your nal aggregate demand curve [ADS] is parallel to AD1 and A32. You can see the slopes of 11191 and AD: by selecting them on the graph