Recall that: Ep =C+ Ip + G + X -M and C= Ca + MPC (Y-T) Consider an economy with the following parameters: MPC = 0.8 T =200 G =200 X = 300 M = 200 Ms = 2000 Md = 0.25Y - 25r Ca = 1200-8r Ip =660 -12r a. Derive and clearly show the IS curve b. Derive and clearly show the LM curve; C. Find the equilibrium income and interest rate d. How much is invested when the economy is in equilibrium? e. Now consider an expansionary fiscal policy that takes G to a total of 400 f. Find the new equilibrium Income and Interest rate How much is invested when the economy is at this new equilibrium h. Explain what happened after the increase in G