Question 3. The short run: IS/LM An economy is as follows Goods market: Financial market: Money market slc=5 I =18 200r E _ 0.02 MPC=0.72 P Y 2 Go=20, T=18 (?' 5000) e M=40, P=2 Before shocks and policies, Y = 74 and r = 4.65%. But now the government spending increases to G, = 22. (a) Write down the expressions that describe the two markets for the IS curve. From them, derive the expression for the IS curve of the formY = mr + b where m and b are numbers. Use the new value of G; = 22. Show work. (b) Before the markets react and adjust the interest rate from r = 4.65%, find the disequilibrium expenditure