Part I: Initial Conditions Suppose the economy can be characterized by the following set of equations: (1)L1=0.2Y (5)1 =180 1.5r (2) L2 = 250 257 6)S=-35+0.1(Y = T) (3)ym=175 (1) T = 100 + 0.06Y (4) MB = 90 8) G = 150 1. Use the money market-clearing condition to find the LM function and the Z-D equilibrium condition to find the IS function. 2. Calculate the equilibrium values of v, Y, I, S, C, T, L1, L2, and (G-T). Part I1: Shock to Business Confidence Suppose a public health response to a novel virus leads to corporate executives and small business proprietors being concerned about a sustained period of low profits: i.e., business confidence decreases. The economy now can be characterized by the following set of equations: (1)L1 =0.2Y (5)1 = 140 1.5r (2) L2 = 250 257 6)S =3540.1(Y T) BG)ym=175 (7) T = 100 + 0.06Y (4) MB = 90 (8) G = 150 3. Use the Z-D equilibrium to find the new IS function. 4. Calculate the equilibrium values of r, Y, I, S, C, T, L;, L2, and (G-T). 5. Compared to the initial conditions, which variables increased and which variables decreased