Suppose thateach0.1-percentage-pointincrease in the equilibrium interest rate induces a

$4

billion decrease in real planned investment spending by businesses.Inaddition,the investment multiplier is equal to

3,

and the money multiplier is equal to

3.

Furthermore,every

$10

billion decrease in the money supply brings abouta0.1-percentage-pointincrease in the equilibrium interest rate. Use this information to answer the following questions under the assumption that all other things are equal.

Calculateby howmuch the real planned investment must decrease if the Federal Reserve desires to bring about an

$60

billion decrease in equilibrium real GDP.

$nothing

billion.

(Enter your response rounded to onedecimalplace.)

Calculate by how muchmust the money supply decrease for the Fedto induce the change in real planned investment to bring about an

$60

billion decrease in equilibrium real GDP.

$nothing

billion.

(Enter your response rounded to onedecimalplace.)

Calculate the dollar amount of open market operations that the Fed must undertake to bring about the money supply decrease required for an

$60

billion decrease in equilibrium real GDP.

$nothing

billion.

(Enter your response rounded to onedecimalplace.)