The economy is expressed as Y= C+ I+ G
Where; C= 200+ .6(Y-T)- 300r
I= 50+ .08Y-1 50r
G=100+ . 10Y- 200r
T=500+ .002Y- 500r
And
Inflation rate= 4%
The discount rate= 7%

Problem: The government targets the economic growth. Suppose the Central Bank lowers the nominal interest rate to 5% and ∆P assumes to be zero, what is the growth rate of GDP?

It’s not the math that is confusing to me. I am not quite sure what r equals, and how the discount rate is used in this situation.