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Suppose that both the current TFP z and future TFP z 0 decline. Determine its effect on equilibrium output, interest rate, wage, employment, consumption, leisure,

Suppose that both the current TFP z and future TFP z 0 decline. Determine its effect on equilibrium output, interest rate, wage, employment, consumption, leisure, and investment. Explain. Make sure you illustrate the effect using two figures: a figure illustrating labor market clearing and a figure illustrating goods market clearing.

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