Consider the following two independent cases for an economy, which is facing a prolonged recession. In the first case, the government decides to increase its purchases by increasing its expenditure on...

Consider the following two independent cases for an economy, which is facing a prolonged recession. In the first case, the government decides to increase its purchases by increasing its expenditure on infrastructure development. How does this increased expenditure affect the economy’s aggregate demand and output level? In the second case, if the central bank of the country increases the interest rate (bank rate), how does it affect the economy’s aggregate demand schedule and the output?