how to calculate this?

(b) Consider the following macroeconomic model Goods market: Money market: C = 300 + 0.9K; M\" = 9,300 + 021' 2,500r I = 1,240 2,000r M3 = 10,000 T = 2,000 P = 1 G = 2,000 EX = 500 IM = 031' Suppose that initially income (Y) is 5,000 and the real interest rate (r) is 0.12. Full-employment is 5,200. (i) The government is considering using expansionary scal policy (by increasing government spending) to increase national income by 200. If the increase in G succeeds in increasing income by 200, what change in the real interest rate is necessary to restore equilibrium in the money market? (Be precise in terms of size and direction.) (ii) How much will investment change as a result of the change in real interest rates from part (i)? (Be precise) E0114 2018/19 A 001 Tum over Page 6 (iii) Taking into account the change in investment from part (ii), how much should government purchases be increased in order to achieve the full-employment level of national income? Is this change in G bigger, smaller or the same as it would have been if investment was not a function of interest rates? Briey explain your answer. (35 marks total)