Use the IS-LM and AD-AS diagrams to analyze the effects of the following events onequilibrium (i) output, (ii) interest rates, and (iii) prices, assuming that all curves havenormalshapes.

1. [ 6 points]An increase in the marginal propensity to consume out of disposable income.
2. [ 6 points]Introduction of financial regulations that increase the demand for liquidity.