1. Households behavior (30 points). Suppose output in the economy is produced with only labor (no capital for simplicity). The production function is Y =
1. Households behavior (30 points). Suppose output in the economy is produced with only labor (no capital for simplicity). The production function is Y = AN, where Y denotes total output in the economy, A denotes productivity, N denotes total labor in the economy and a is a parameter with 0
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