The Theory of National Income, Money, and Prices: With the Presidency, House and Senate all in one party's control, some people expect to see an increase in government spending. We will explore how this could affect long-run outcomes using the Theory of National Income. Consider an economy, where GDP, inflation, and interest rates can be described by the following equations

Y^s = AK^0.5L^1-0.5

Y^D = C + I + G

K(bar) = 225

L(bar) = 900

I(r) = 200 - 20r

G = 150

C = 10 + 0.8(Y - T)

T = 100

%deltaM + %deltaV = %deltaP + %deltaY

Suppose that A=2, %deltaM = 1.5%, K and L are fixed, velocity of money is constant, Fisher equation holds (i=pi+r)

Solve for GDP, Consumption, Investment, real interest rate, nominal interest rate.