1. Use the following information to answer the questions, make sure to show everything graphically as well as numericall

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1. Use the following information to answer the questions, make
sure to show everything graphically as well as
numerically—if asked for:
Labor Market and Production Function:
W=N+10
W=210-N
Y=1*N.5K.5, K=25
Goods Market: Money Market:
C=25+0.5*(Y-T)-100r Ms=10/P, P=1
T=10 Md=1/2 (Y) – 100r
G=20-100r
I=30-100r
a) What is the w*, Y*, and N*? How does the labor market relate to
the IS/LM/FE and AD/AS model? Show graphically
and solve numerically.
b) What is the initial general equilibrium r*, Y* and P*? Show
graphically and solve numerically.
c) Suppose that there is a decrease in G by 2. What is the SR r, Y,
and P? Show graphically and solve numerically.
d) Suppose that at the SR the Federal Reserve wants to stabilize
the economy. Show graphically (only not numerically)
the stabilization. Numerically what is the LR r, Y, and P?
e) Suppose that at the SR the Government wants to stabilize the
economy. Show graphically (only not numerically) the
stabilization. Numerically what is the LR r, Y, and P?