Assume that the demand for real money balance ( M / P) is M / P = 0.6 Y - 100 i, where Y is national income, and i is the nominal interest rate (in percent). The real interest rate r is fixed at 3 percent by the investment and saving functions. The expected inflation rate equals the rate of nominal money growth.

a.If Y is 1,000, M is 100, and the growth rate of nominal money is 1 percent, what must i and P be?

b.If Y is 1,000, M is 100, and the growth rate of nominal money is 2 percent, what must i and P be?