4. The CHIPS and Science Act provides $52.7 billion for American semiconductor research, development, manufacturing, and workforce development. This includes $39 billion in manufacturing incentives, including $2 billion for the legacy chips used in automobiles and defense systems, $13.2 billion in R&D and workforce development, and $500 million to provide for international information communications technology security and semiconductor supply chain activities.Assume the US economy begins with equilibrium interest rate, r*, in the loanable funds market and the real exchange rate, e* in the foreign exchange market. Use the model of loanable funds to determine the net effect (directional) on:

a) (2 pts) National savings, S

b) (2 pts) Real interest rates, r

c) (2 pts) National investments, I

d) (2 pts) Net foreign investments, NFI

e) (2 pts) Real exchange rate, e

f) (2 pts) Net exports, NX

g) (3 pts) If the Federal Reserve wanted to keep the interest rates constant after this law goes into effect (offset the original effect in part b above), it could do so by increasing the money supply (expansionary policy) or decreasing it (contractionary policy). Which monetary policy would you subscribe, and why?