Suppose that the real money demand function is L(Y,r + 7) 0.01Y (r + 7) where Y is real output, r is the real interest rate, and T is the expected rate of inflation. Real output is constant over time at Y = 150. The real interest rate is fixed in the goods market at r = 0.05 per year. a. Suppose that the nominal money supply is grow- ing at the rate of 10% per year and that this growth rate is expected to persist forever. Currently, the nominal money supply is M = 300. What are the values of the real money supply and the current price level? (Hint: What is the value of the expected inflation rate that enters the money demand function?) b. Suppose that the nominal money supply is M 300. The central bank announces that from now on, the nominal money supply is going to grow at the rate of 5% per year. If everyone believes this announcement, and if all markets are in equilib- rium, what are the values of the real money supply and the current price level? Explain the effects on the real money supply and the current price level of a slowdown in the rate of money growth