The demand curve and supply curve for one-year discount bonds with a face value of $1,000 are represented by the following equations

Bd: P = 1100 -0.5Q

Bs: Q=P-500

Assume, this demand and supply equations represent both corporate and government bonds market. Ceteris paribus, suppose there is a change in the bond market due to the corporate bond becoming riskier.

a) Which one change for the corporate bond (demand or supply), and by how much, so that the interest rate for the corporate

bond changes by 0.03? 3P

b) As corporate bond's interest rate changes by 0.03 due to its becoming riskier, by how much should government bond's demand change (assuming gov. bond's supply remaining the same) so that the risk premium (based on interest rate assessment) is 0.04? 3P