Macroeconomics Questions

Evaluate the following statements as truelfalsefuncertain and explain your answer carefully. Each answer should be approximately one page long. Please use diagrams andfor algebra when answering the question, when appropriate. (a) According to the Keynesian labour market model studied in class, an increase in the minimum wage would increase unemployment, the real wage, prices and reduce investment. (8 marks) (b) According to the Phillips curve interpreted as a dynamic nominal wage adjustment mechanism, interest rates should decrease whenever unemployment is above the natural rate. (8 marks) (c) According to the Solow-Swan growth model, any short run reduction in output per capita due to the COVIDt 9 crisis (Pushing it below its steady state value) will eventually be completely offset by a period of accelerated growth so that, in the very long run, the crisis will have no effect on output per capita at all. (8 marks)