Suppose that the demand for and supply of bonds both change with the state of the business cycle. In economic expansions, the demand for bonds is given by the equation:
D = 200 + 2,000r

and the supply of bonds is:
S = 500 - 1,000r

where r is the expected real interest rate. In recessions, however, both the demand for and supply of bonds is lower:

D = 150 +2,000r

S = 300 - 1,000r

A - Given these equations, what is the equilibrium expected real interest rate in economic expansions?

B - Given these equations, what is the equilibrium expected real interest rate in recessions?

C - If the expected inflation rate is 4% in economic expansions, what is the equilibrium nominal interest rate in economic expansions?

D - If the expected inflation rate is 2% in recessions, what is the equilibrium nominal interest rate in recessions?