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classical economy is described by the following equations:(1) Production function:y = (20N -¼N ²)(2) Labour supply function:Ns=4 20(1-t ) w/p, t =0.2(3) The proportion of income that is held in the form of money (k) is 0.25 and money supply (M) is 297.(4) Demand for loanable funds function: I =100 -5r(5) Supply of loanable funds function: S =30 9rWhere, y is real output or income, N is employment, W/P is the real wage, W is the nominal wage, P is the price level and r is the interest rate.(a)