A closed economy has the following AD and AS curves: 

AD curve Y = 300 + 30(M/P) 

AS curve Y = Y + 10(P + Pe ) 

Here, Y̅ = 500 and M = 400. 

a. Suppose that P^e = 60. What are the equilibrium values of the price level P and output Y? (The solutions for P in this part and in part (b) are multiples of 10.) 

b. An unanticipated increase raises the money supply to M = 700. Because the increase is unanticipated, P^e remains at 60. What are the equilibrium values of the price level P and output Y? 

c. The Bank of Canada announces that the money supply will be increased to M = 700, which the public believes. Now what are the equilibrium values of the price level P, the expected price level P^e, and output Y?