Short Questions:

(f) In the data, you notice that average real wages and the employment-population ratio have both risen. Using a labor supply and demand model, how could you explain this fact? (5 points) (Note this question is not a continuation of any of the previous questions.)Short Question 3: [25 points) [3] Briey provide two reasons why higher levels of ination might be costly for an eoon- omy. [4 points) (b) Briey explain what drives sustained economic growth rate in the Homer model? (3 points) [(3] Draw a graph with a. labor supply curve and a labor demand curve [put employment on the xexis]. Explain Why one curve slopes upwards and the other curve slopes downwards. (5 points] [d] An unusually warm summer increases workers' preference for leisure time. Show this change on your supply and demand diagram. What effect will this shock have on employment and wages? [3 points) (Note this question is not a continuation of any of the previous questions.) {e} Suppose there has been an increase in female labor force participation, just like in the United States. Show how to model this change on a labor supply and demand diagram. What happens to the employment-population ratio and what happens to the wage? Explain. (5 points) (Note this question is not a continuation of any of the previous questions.)