Question 5. Chapter 9, Numerical Problem 4, pages 354-355, 8th ed; p. 352-353, 9th ed; p. 362-363, 10th ed.The production function in an economy is Y = A(5N – 0.0025N2)

where A is productivity. With this production function, the marginal product of labor is MPN = 5A — 0.005АN Suppose that A = 2. The labor supply curve is NS = 55 + 10(1 – t)w where NS is the amount of labor supplied, w is the real wage, and t is the tax rate on wage income, which is 0.5.Desired consumption and investment are C^d = 300 + 0.8(Y — Т) — 200r I^d = 258.5 — 250г Taxes and government purchases are T = 20+ 0.5Y G = 50 Money demand is \frac{M^{d}}{P}=0.5 Y-250\left(r+\pi^{e}\right) The expected rate of inflation, n^e , is 0.02, and the nominal money supply M is 9150. a. What are the general equilibrium levels of the real wage, employment, and output?b. For any level of output, Y, find an equation that gives the real interest rate, r, that clears the goods market; this equation describes the IS curve. (Hint: Write the goods market equilibrium condition and solve for r in terms of Y and other variables.) What are the general equilibrium values of the real interest rate, consumption, and investment?c. For any level of output, Y, find an equation that gives the real interest rate that clears the asset market; this equation describes the LM curve. [Hint: As in Part (b), write the appropriate equilibrium condition and solve for r in terms of Y and other variables.] What is the general equilibrium value of the price level?d. Suppose that government purchases increase to G = 72.5. Now what are the general equilibrium values of the real wage, employment, output, the real interest rate, consumption, investment, and price level?