Consider an economy that may be represented by the following short-run IS-LM model described by equations (1) through (6): (1) C = 200 + 0.8(Y - T) (2) T = 800 (3) G = 500 (4) 1 = 700 - 25 r (5) Y = C+1+G (6) M/P = 0.6Y - 60r where the nominal money supply is M=600 and the price level is given by P = 1. Suppose that the government increases its expenditures by 100 units, but the Bank of Canada would like to maintain the output constant. Then, (approximately) The money supply must increase by 100 units and r* will decrease by 2 percent. The money supply must increase by 240 units and r' will increase by 4 percent. The money supply must decrease by 180 units and r* will increase by 2 percent. The money supply must decrease by 300 units and r* will increase by 3 percent