Suppose that Nepalese economy has realized following structural equations for the product and money markets in 2025: C = 300 + 0.8Yd (Yd = Y T), T = 120 + 0.2Y, Mt = 0.7Y, Msp = 250 4200i, I = 350…

Suppose that Nepalese economy has realized following structural equations for the product and money markets in 2025: C = 300 + 0.8Yd (Yd = Y - T), T = 120 + 0.2Y, Mt = 0.7Y, Msp = 250 - 4200i, I = 350 - 4500i, G = Rs 400 billion, Ms = Rs 600 billion. a. Compute equilibrium level of income and rate of interest. b. Determine the new equilibrium situation when Nepal Rastra Bank decide to increase money supply by Rs 400 billion and Government of Nepal also increase planned expenditure by Rs 200 billion. c. Analyze the effect of change in monetary and fiscal policy on national income and rate of interest.