(b) Illustrate using a graph the effect of a decrease in the proportion of labour allocated to the ideas sector (y ll). On the graph, label thelevel effect of this change. Explain the intuition of the change in your graph. 3. Human Capital in the Romer Model:Let's consider the possibility that human capital is required to produce ideas. To add human capital, we assume the ideas production function is AAt+1 = ZAthLaJ' (1) Furthermore, let's assume that human capital requires labour to produce: H: = Ls,t' (2) The labour is now split into three_ groupsw + Lag + L3,: = f: For simplicity, let's assume Lat = 0-513, Lent = .2513, and L3]: = 25L. Assume L = 100. (a) What is the economic interpretation of using iabour to produce human cap- ital? (Hint: This is not a trick question. I am just looking for basically the denition of human capital.) (b) Solve for the balance growth path of GDP per capita in this model. (c) Does the inclusion of human capital increase the rate of growth compared to the standard model? Explain. (Hint; Think about the growth rate if the extra labour used ianlt was just allocated to ideas production or goods production in the basic model. How does that case compare to this case?) 4. The Bathtub Model and JobKeeper and JobSeekerConsider the bathtub model of unemployment given by E: + U: AUt+1 L (3) 3E: fUt (4) where 57 and E denote the steady levels of unemployment and employment, re spectiveiy. (a) Solve for the steady state level of unemployment. (Hint: \"n+1 = 0) (b) What is the effect on steady state unemployment if the separation rate rises (3 Ti)? (c) The JobKeeper program was designed to provided a subsidy to rms to pass on to their employees and is contingent on keeping the jobs intact. Use the model to explain what effect is any this would have on measured unemploy- ment. (d) The JobSeeker program provides subsidies to workers currently out of work. What parameter in the model would this policy liker affect?What is the impact on unemployment