1 For parts (a) and (b) assume that the following information applies to an economy: the nominal wage rate in the economy is $24 per hour the aggregate price level is $8 there is a 90% employment rate. (a) Now suppose there is a decline in the aggregate price level while the nominal wage stays the same. Using a wage-setting curve, show how this reduction in the aggregate price level affects the real wage in this economy. (b) Using a wage-setting curve, show the effect of a 50% reduction in the aggregate price level on the unemployment rate in the economy. On your diagram you will also need to indicate the total labour force for the economy. (Note: you do not need to provide the exact number for the new employment and unemployment rates after the decline in the price level, however you do need to clearly illustrate these in your diagram)