AD C+I+G C $200+0.8YD G $1,200 I=$500-30i TA 0.375Y TR=$125 J YD Y TA+TR Ms/P $7,000 and L = Md=2Y-80i The GE solution for the above from your last quiz was: IS Curve: Y $4,000-60i [From Y AD = $2000-30i + 0.5Y] LM Curve: Y=3500+40i i=5% and Y = $3,700 1. If Government spending increases by $250 to $1,450 (Expansionary Fiscal Policy), find the new General Equilibrium solution for (i,Y). [3 points] 2. Based on the original GE values in quiz 3 (i-5% and Y = $3,700) and the new values from Expansionary Fiscal Policy (EFP) in #1, calculate the impact from Crowding-Out. [2 points] A. Now assume the Fed uses EMP to increase the Money Supply (Ms) from $7000 to $8000 at the same time Government increases Spending from $1,200 to $1,450 (your IS curve from #1). Find the GE values for (i.Y). [3 points] B. Did Crowding-Out occur? Explain. [2 points]