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Economics 2326 (Money & Banking Final Exam Short Answer Questions Question #3: Consider an economy described by the following set of values: "C = $3.25 trillion mpc = 075 7= $1.2 trillion d = 0.30 G = $3.5 trillion x = 01 T = $3 trillion 2 = 1 NX = $1.5 trillion 7 =2 7=1 What is the expression for the Monetary Policy (MP) curve? What is the expression for the Aggregate Demand (AD) curve? Assume that =1%. What is the real interest rate (r)? and equilibrium level of output? Suppose the Bank of Canada increases "r tor =3.5. What is the new real interest rate and new equilibrium level of output? What type of monetary policy did the Bank undertake ? What would be the reason the bank that the Bank would undertake this type of policy? (Maximum 2 sentences)