1. Assume fiscal policy is expansionary and the government funds the resulting deficit throughborrowing, In tÿigure 5-7.1, shift one curve in each graph to illustrate the effect of the fiscal policy,and label the new equilibrium values.
2. How ÿs611 the change in the equilibrium interest rate in the loanable funds market affect the short-run aggregate supply (SRAS) curve in the long run? Show on the AS/AD graph above, and explain.Advanced Placement Economics Macroeconomics: Student Resource Manual © Council for Economic Education, New York, N,Y.183