(10 points) Suppose that researchers announce a new vaccine for Covid-19 which is 100% eective. This vaccine...
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(10 points) Suppose that researchers announce a new vaccine for Covid-19 which is 100% eective. This vaccine will be available in a few years. This can be modelled as z unchanged, z' increases. Use the real intertemporal model (which includes the current labour supply, NS ; and demand curves, N D, and the output supply, Y s ; and output demand, Y; curves) to show graphically what happens to output, employment, real wages and the real interest rate. Also, infer what happens to investment and consumption
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