Use the information about the following economy to build the IS-LM model. The consumption function is given by C= 300 + 0.6(Y T). The investment function is I = 700 80r. Government spending and taxes are both 500. a. The money demand function is (M/P)^d = Y 200r. The money supply M is 3,000 and the price level P is 3. Find the equilibrium interest rate r and the equilibrium level of income Y. b. Suppose that government spending is increased from 500 to 700. How would this shift the LM curve in a graph? What are the new equilibrium interest rate and level of income? c. Suppose instead that the money supply is increased from 3,000 to 4,500. How does the LM curve shift? What are the new equilibrium interest rate and level of income? d. With the initial values for monetary and fiscal policy, suppose that the price level rises from 3 to 5. What happens? What are the new equilibrium interest rate and level of income? g. For the initial values of monetary and fiscal policy, derive and graph an equation for the aggregate demand curve. What happens to this aggregate demand curve if fiscal or monetary policy changes, as in parts d.) and e.) (simply state which direction the aggregate demand curve shifts in each case)?