Consider an economy that produces one good, chairs. Chairs sell for a price of $100. This economy can produce a maximum of 12 million chairs; currently, they're producing 11.3 million. This economy also has a government which issues bonds to raise revenue. Suppose the demand for government bonds with a $500 face value is P = 500 0.002Q, and there are currently 10,000 bonds issued.

1 - What is the current price of $500 face value bonds? What is the interest rate associated with this?

2 - Suppose the central bank wishes to intervene to restore interest rates to the level you found in part 1. Do they sell or purchase bonds, and how many?