1 Forecasting analysis Assume an economy is predicted to have a boom in the next period represented by a rise in z' (future productivity). Analyze how the macroeconomic variables in this period change by focusing on the direct effect only (the slides mention also indirect effects but you don't have to worry about them). 1. You need to answer how the current macro variables (C. N. w. Y, r, /) alter based on the two period production model. Make assumptions if necessary. 2. How does the future GDP Y' change because of a rise in 2'? 3. What do you observe by comparing the GDPs in (1) and (2)? Interpret your results and extract any implications