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Suppose that current capital K decreases. Answer the following questions about this change:(a) Draw the impact of the decrease in K the firm's investment demand
Suppose that current capital K decreases. Answer the following questions about this change:(a) Draw the impact of the decrease in K the firm's investment demand curve.(b) Draw the impact of the decrease in K on the Labor Market.(c) Given your answers in parts (a) and (b), how does the change in K impact the output supply and output demand curves? Draw these changes. Thus, what happens to the equilibrium r and Y? (d) Overall, what happens to investment (I) and employment (N)?
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