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pls show a proper working The economy is initially in its long-run equilibrium. The outbreak of the COVID pandemic has caused a death toll of

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pls show a proper working

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The economy is initially in its long-run equilibrium. The outbreak of the COVID pandemic has caused a death toll of more than 330,000 in the country. a) According to the long-run classical model, what happens to the equilibrium levels of output, real interest rate, and investment? What happens to the real wage and the real rental price of capital? Explain your answer with the aid of THREE diagrams one for the loanable funds market, one for the labour market, and one for the rental market for capital. (15 points) b) Continued 'om part (a) and consider what happens to the economy in the very long run. 0 What happens to the stock of the capital in the very long run? Use the long-run classical model to examine the effects on output and real interest rate in the very long run. 0 If the government wants to the level of investment om changing (i.e., keep the level of investment at the initial level in part (b), what should it do? Explain your answer with the aid of a NEW diagram for loanable funds market. (15 points)

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