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Now suppose that in response to Covid, the unemployment rate rises to 5%. In the event, it is viewed by market participants as temporary and,

Now suppose that in response to Covid, the unemployment rate rises to 5%. In the event, it is viewed by market participants as temporary and, as a result, the real wage stays at the level found in part b). Use your model to find the new level of output. In percentage terms, by how much has output changed

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