The following parameters describe the structure of a hypothetical economy: Autonomous consumption=240 Autonomous investment=1000 Autonomous taxes=100 Autonomous government expenditure=400 Real money supply (M/P)=600 Tax rate=0.25 Marginal propensity to consume=0.8 Interest elasticity of investment=50 Interest elasticity of demand for money=62.5 Income elasticity of demand for money=0.25 a) Find λ1, λ2, β1, β2. Determine and explain the relative effectiveness of fiscal and monetary policies. b) Use your answer in part a) above to determine equilibrium income and interest rate. c) State the values of the fiscal and monetary policy multipliers if the economy is in a liquidity trap. Explain. d) If government expenditure is increased by 150 units, show how equilibrium interest rate and equilibrium income will change. Can you determine the extent to which investment is crowded out as a result? Explain. e) Assume a GHȼ450 million increase in government expenditure is financed by a GHȼ300 million increase in taxes and GHȼ150 increase in money supply. Without deriving the IS-LM equations, find the new equilibrium income and interest rate. Explain. f) If government wants equilibrium income and interest rate increased by 1400 and 0.8 units respectively: i. Determine how much government expenditure and money supply should be changed to achieve these targets. ii. Determine how much autonomous taxes expenditure and money supply should be changed to achieve these targets.