Suppose the economy is characterized by the following equations.

IS curve: r = 20.200.002Y

LM curve: M/P = Y250(r + ^e)

SRAS curve: Y = +100(P-P^e)

The nominal M_s = 19, 800, ^e = 0.20, and Y= 10, 000.

a.If the economy begins in general equilibrium, what are the equilibrium values of the

P, Y , and r?.

b.If the P ^e is the P you found in part (a), what happens to the P, Y, and r? in the short run if there's an unanticipated decrease in the nominal Ms to 14,737.5? Hint: guess some price levels that differ from the one you found in part (a) by increments of 0.25.

c.If the P ^e is the P you found in part (a), what happens to the P, Y, and r in the short run if there's an unanticipated increase in the nominal money supply to 24,937.5?