Consider the following demand and supply functions of units of a bond in an economy:

(1).D=100 + 50k + 3W - 100ERI

(2).S=900 - 60k + 5BD+120ERI

Where,

k = the rate of return on the bond in percentages terms.

W = the aggregate portfolios wealth measured in billions of dollars,

ERI = the expected rate of inflation, also measured inpercentage terms

BD = budget deficit in billions of dollars

Suppose that currently W = 500 billion,ERI = 5% and BD = 200 billion. Find equilibrium k and equilibrium quantity of the bond demanded and supplied.

Assume now that ERI rises to 5% from 4%, find the new equilibrium level of k and the new equilibrium quantity of the bond demanded and supplied.