PLEASE ANSWER THE FOLLOWING QUESTION BELOW

(a) Find the general equilibrium of the real interest rate (r) and the price level (P). [Hint: You can use the goods market (IS) or the asset market (LM) to express the (r). For the price level (P), express the equation in terms of the general equilibrium of the real interest rate (r) computed earlier] (b) Suppose that the economy is characterized by the following equations: Production / Output Goods Market Money Market Y = 4(3.00/ - 0.00640/2 ) cd = 310 + 0.75(Y- T) -220r M" /P = 0.40Y - 250 (r+ me) MPN = 4(3.00 - 0.0128N) /d = 260.0 -270r * = 0.01 NS = 62.0 + 15(1 - t)w T = 25 +0.25Y M = 9200 Initially, the level of government purchase is 60, then it increases to 85. Calculate the initial and new general equilibrium values of the real wage, employment, output, the real interest rate, and the price level, after the increase in government purchases.An economy is defined by the following equations: f1 - f2no Y= A f, N - -$ 2 N2). MPN = A(f, - 12 N), W = A 1 + (1- 1) Af2nw] Co = Co + cy (Y- T) - Gpr, = io - ir, Y= A FIN - 21 2 ( M)?). N= no + (1 - t)At , n w 1 + (1 - 1) Af 2nw ' P= 10+ ly Y- 1,(r+me ). NS=no+ n, (1-t)w, and T=to+ty, where Yis output, Y is full-employment output, MPN is the marginal product of labor, NS is the labor supply, w is the equilibrium wage, N is the equilibrium level of employment, C" is desired consumption, / is desired investment, T is taxes, M / P is the demand for money, and Tre is the expected rate of inflation