(chapter 7) consider an economy with a constant nominal money supply, a constant level of real output y = 100, and a constant real interest rate r = 0.10. suppose that the income elasticity of money demand is 0.5 and the interest elasticity of money demand is -0.1. a. by what percentage does the equilibrium price level differ from its initial value if output increases to y = 106 (and r remains at 0.10)? (hint: use eq. 7.11.) b. by what percentage does the equilibrium price level differ from its initial value if the real interest increases to r = 0.11 (and y remains at 100)? c. suppose that the real interest rate increases to r = 0.11. what would real output have to be for the equilibrium price level to remain at its initial value?