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3) Assume the following equations summarize the structure of the economy. C = Ca + 0.5(YT); Ca = 500; T = 200; Ip = 1,500-50r; G = 100; and Md = 0.25Y Ms = 250 a) Compute the equilibrium interest rate and output. (0.5) b) Suppose the government increases its spending by 500. Compute the new equilibrium interest rate, equilibrium output, and effectiveness of the policy (0.5)? Discuss the different understandings in question 1 and question 3 on the nature of money. (2) Is this a Keynesian or a neoclassical situation? (0.5)