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

Demand, D = 100 + 50k + 3W-100

Supply, S = 900 60k + 5BD + 120

Where, k = rate of return on the bond, measured in percentage terms,

W = aggregate portfolio wealth, measured in billions of dollars,

= the expected rate of inflation, measured in percentage terms,

BD = the budget deficit, measured in billions of dollars.

Suppose that currently W = 500, = 4 and BD = 200. Find the equilibrium levels of k and the quantity of the bond demanded and supplied.

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