Consider IS-LM model. Let the money demand function be ()=60 - 20r + 4Y, the consumption function be C = 12 + 0.8(Y - T) and the investment function be / = 30 - 2/ where r is the real interest rate in %. Let T denote taxes, G denote government purchases, P denote the price level and M denote the money supply. Calculate the following (Round up to TWO decimal places if needed. Enter only numbers) (1) Assume that T = 20, G = 10, P = 3 and M-= 300. (a) Calculate the equilibrium real interest rate r (b) Calculate income Y (c) Calculate consumption C (d) Calculate investment I (2) Suppose the government decreases G from 10 to 6. What will be the new equilibrium level of Y and r? (a) r= (b) Y= (3) Suppose the new level of money supply is M = 240 (while G stays at 10), what is the new equilibrium level of Y and r? (a) r= ( b ) Y= QUESTION 11 Suppose the production function of a country is Y = K 3 L 3 ". And its capital stock is K = 27 and labor force is $ = 64. Calculate the following (Enter only numbers. Round up to ONE decimal place if needed) (a) What is the labor market clearing real wage under flexible real wage? (b) What is the number of the unemployed under rigid real wage W 2 . P