Consumption : C=40+0.75Y

Investment : I=140-10i

Government Expenditure : G=100

Tax : T=80

Money Demand : Md=0.2Y-5i

Money Supply : Ms=85

(i is % interest rate ; other figures in Rs. Crores)

a)Find out the equilibrium income ,Y and interest rate i.

b)Suppose the government increases its expenditure on education by Rs. 65 Crores?

What would be its effect on equilibrium income and rate of interest.