Problem 1: Suppose that a financial crisis hits Econland and reduces the wealth of its households. Assume standard shapes for the production, labor demand, labor supply, saving and investment curves. Further, assume that Econland is a closed economy. a) Illustrate the effect of the change in S = S(Y1, Y2, W) due to the reduction in wealth on the saving-investment diagram for the market of funds. b) What will be the resulting change in r and I? Explain. c) If the fall in household wealth makes workers supply more labor for any given real wage, how will the reduction in wealth affect the equilibrium level of employment? d) As a result, will the marginal product of labor, MPN , increase or decrease? Explain. e) How will the change in employment affect o