4. The demand and supply of a corporate bond (in units) is given by the following equations respectively. D=60k + 0.8 W - 607 + 2y + 5 i* S=600 - 40k +90 + 8BD + 5y Vhere k=the nominal yield to maturity of the bond in percentage terms W=the aggregate wealth of investors in billions of dollars, The = the expected rate of inflation in percentage terms y=national income, and BD = government budget deficit, and * = foreign rate of interest in percentage terms Suppose W = 2,000 billion, Tre=2%, y = $500 billion, BD=$50 billion and i* = 10% find equilibrium k and equilibrium quantity of the bond traded. Secondly, assume that keeping everything else constant, the expected rate of inflation rises to 3% from 2%. Recalculate the new equilibrium k and equilibrium quantity of the bond traded. Thirdly, calculate the real rate of interest under each of two levels of the expected rate of inflation. 4. The demand and supply of a corporate bond (in units) is given by the following equations respectively. D=60k + 0.8 W - 607 + 2y + 5 i* S=600 - 40k +90 + 8BD + 5y Vhere k=the nominal yield to maturity of the bond in percentage terms W=the aggregate wealth of investors in billions of dollars, The = the expected rate of inflation in percentage terms y=national income, and BD = government budget deficit, and * = foreign rate of interest in percentage terms Suppose W = 2,000 billion, Tre=2%, y = $500 billion, BD=$50 billion and i* = 10% find equilibrium k and equilibrium quantity of the bond traded. Secondly, assume that keeping everything else constant, the expected rate of inflation rises to 3% from 2%. Recalculate the new equilibrium k and equilibrium quantity of the bond traded. Thirdly, calculate the real rate of interest under each of two levels of the expected rate of inflation