(please look at the graphs on "1" to do question 2 and 3. Thank you)

1. Assume that the Central Bank acts to bring output and inflation back to their full-employment levels for the graphs below.

*) Keynesian Cross Graph ( When Government spending vise) E Y = E Ez Ex a-CT + 1 + G2 a - CT+ 1 + + ACT *) IS , LM Ct raph ( When government spending vise ) LMA /LM 2 11 154 YA yz y\f3. Let to represent the state of the economy before any changes. Let to represent the end of the short-term, and fo represent the end of the medium-term. Compare to with to in terms of the following variables. (a) inflation (b) LM curve (e) r (d) Investment (e) Consumption (f) Demand (Z) (g) Production, Income2. Based on the graph above, indicate whether the follow- ing elements rise (f) or fall (() or stay the same (>) in the short-term. (a) Government Consumption (b) Saving (c) Consumption (d) Inventories (e) Employment (f) Production, Income (g) IS curve (# or