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A classical economy is described by the following equations: Suppose desired consumption is given by Cd: 100 + 0.8Y 5001' 0.50 and desired investment is given by Id: 100 5001' Real money demand is given by: Ma ?=y2000i Other variables are expected ination rate is 0.05; Government spending is 200; ill-employment output is 1000, and nominal money supply is 2100. (a) Find the general equilibrium values of the real interest rate, consumption, investment, and the price level. (10 marks) (b) Suppose the nominal money supply increases to 2800. Find the equilibrium values of the real interest rate, consumption, investment, and the price level. (assume that the expected ination rate is unchanged) (6 marks) (c) During a recession, would classical economists suggest that the changes in monetary policy be used to improve economic conditions? Briey explain. (4 marks)