***Please show calculations and address how the 25 % income taxes affect the calculations, thanks!***

Question 18 (6.5 points) Consider the following closed economy short-run IS-LM model with income taxation. The economy is described by equations (1) through (6): (1) C = 200 + 0.8(Y - T); (2) T = 800+0.25Y;(3) G = 500; (4) 1 = 700 - 25 r ; (5) Y = C + I + G ; (6) M/P = 0.6Y - 60r where the nominal money supply M=600 and the price level is P = 1. (There are 25% income taxes in this model). Then, in the short run, the equilibrium output for the economy is given by (approximately): Y* = 1553.85 Y* = 2108.00 Y* = 2524.00 Y* = 1900.00