Question 2 Next, we will analyze the short-run equilibrium. Short-run equilibrium output is initially at the LRAS level (Y = 1000). [23 marks] 1. Explain how the short-run values of ('r, i) are determined before the climate shock. 2. Which, if any, of the graphs from Appendix A best depicts the short-run change in the interest rate(s) due to the climate shock? Explain. 3. Which, if any, of the graphs from Appendix B best depicts the short-run change in output and price due to the climate shock? Explain. 4. Which, if any, of the graphs from Appendix C best depict the change in the Keynesian cross due to the climate shock? Expiain. 5. What are the effects of the shock on the short-run equilibrium values of output Y, consumption 0, investment I, real interest rate r and price P? Do NOT give any numerical answers, just ll in the following table with +, or 0 to indicate whether each variable increases (+), decreases (), or doesn't change (0). There are 6 blanks to ll. You do not need to create a table when you type your answers, but please clearly indicate the name of each variable followed by +, ~ or 0. Y C I 7' i P change: For the questions 3-6, give a brief explanation to your answers. Continue to assume the same setting and shock as above. You may explain using words, equations, or by drawing a graph; or any combination of the three