Question

SA Question 3:2-period model
2 period competitive equirium discussed in diss.
PART 3 (2 pts Assume the moresentative form has constant returns-to-scale technology an
ed Exotin wis the labor Demand curveis downwards slopine. That is
labor demand decreases when real wages increase your explanation can be serico
Now make the following additional assumptions about our economy.
. For the consumer the income effect is outweighed by the substitution effect. so that
ince
with an increase in the aggregate labor supply
The economy is a small open economy. It interacts with a much larger global credit net
exogenously fred at the global interest rate
Money is neutral, the domestic monetary authority hos fleuble exchange rates and uses mo
domestic price level stable
PART 3b (2 pts): Draw and clearly label graphs illustrating equilibrium in this economy. You
the first-period labor market a graph for the first period output market, and a graph fort
showing the relationship between M and P.
PART 3c (3 pts): On a copy of your graphs, ilustrate the effects of a decrease in the worla
PART 3d (3 pts): On a copy of your graphs, illustrate the effects of an decrease in First-P
EXTRA CREDIT (2 pts. Now suppose instead that the monetary authority enacts a fixe
how this changes your answers to parts c and d above​

Answer 1

Answer:

Idk

Explanation:

Pls mark as brainlist.