Suppose that an economy's production function is CobbDouglas with parameter = 0.26. Suppose that a gift of capital from abroad raises the capital stock by15%. 8 'I. IWhat happens to total output (in percent)? '35 2. What happens to the rental price of capital {in percent)? '35 3. What happens to the real wage (in percent)? '35 The iSLM model predicts thatan increase in the price level will: Choose: a. increase the interest rate and increase income. [3. increase the interest rate and decrease incomes! c. decrease the interest rate and decrease income. d. decrease the interest rate and increase income. 3.3. In the Keynesian cross model of Chapter 'I 'I, if the interest rate is constant, the 8 MP6 is 0.6, and taxes are increased by $150, by how much does income change