An economy has IS and LM curves given by R = 25 - 2 Y; R = - 10 + 0.5M + Y; where R is the interest rate (percent), Y is GNP ($ billions), and M is the money supply. The government has a target for GNP of $7 . 5 billion. What level of money supply will achieve this and what is the resulting interest rate?
A.
Since Y =7.5, R=10 (percent), M=25($ billions).
B.
Since Y =7.5, R=20 (percent), M=15($ billions).
C.
Since Y =7.5, R=10 (percent), M=15($ billions).
D.
Since Y =7.5, R=20 (percent), M=25($ billions).