Suppose an economy is characterized by the AS/AD curves in the accompanying graph. A decision is then made to increase infrastructure spending by $10 billion a year. 

(a) Illustrate the direct impact of the increased spending on aggregate demand on the graph (ignore multiplier effects). 

(b) If AS is unaffected, what is the new equilibrium rate of output? 

(c) What is the new equilibrium price level? 

(d) Now assume that the infrastructure investments increase aggregate supply by $20 billion a year (from the initial equilibrium). Illustrate this effect on the graph. 

(e) After both demand and supply adjustments occur, what is the final equilibrium 

(i) Rate of output? 

(ii) Price level?