Instructions: Enter your answer as a whole number. If you are entering a negative number include a minus sign. a. How much does aggregate demand need to change to restore the economy,l to its longrun equilibrium? '5 billion b. lfthe MPC is 035, how much do government purchases need to change to shift aggregate demand by the amount you found in pa a? '5: billion Suppose instead that the MPC is 0.8. c. How much does aggregate demand and government purchases need to change to restore the economy to its longrun equilibrium Aggregate demand needs to change by $ |:| billion and government purchases need to change by $ |:| billion. The graph below depicts an economy where an increase in aggregate demand has caused inflation. Assume the government decides to conduct fiscal policy by decreasing government purchases to restore full-employment GDP. Fiscal Policy 160 LRAS 150 AS 140 130 120 110 Price Level 100 1 8 8 828 AD 40 0 80 160 240 320 400 480 560 640 720 800 Real GDP (hillinne of dollars)