Apply the AD/AS (aggregate demand/ aggregate supply) model to evaluate the proposition that increases in government purchases do not influence levels of economic activity in the long term, consistent with the natural rate hypothesis.

Apply the AD/AS (aggregate demand/ aggregate supply) model to evaluate the proposition that increases in government purchases do not influence levels of economic activity in the long term, consistent with the natural rate hypothesis. (Question 1. This should not exceed 1000 words)Apply the Phillips curve framework to evaluate the proposition of new classical economists that increases in aggregate demand can only affect unemployment rates in the short run and only when they are unexpected. (question 2. Should not exceed 1000 words)When including any figures/diagrams in your answer, these MUST NOT be copied from the internet or any other source. Please include your own figures/diagrams, i.e. drawn, photographed and inserted by you into the word document. In this case it is essential that your own full explanation of what the figures/diagrams show is provided. All figures/diagrams should be appropriately cited in the main text.Avoid merely regurgitating a model frameworks for both questions and instead apply it to draw important insights into the workings of the economy.Avoid being descriptive in both answers and rather provide analytical depth. You should cite sources though this is not to be considered as coursework, and as such it is not expected for you to include lengthy quotes. Analysis of ad/as model and Philips curve framework Is the key here. Many quotes and sources aren’t required but when used they should be used to relate to real world examples.Use Harvard referencing style.