Question
Suppose that due to increased drug addiction in the United States, consumers' preferences shift toward more leisure and less consumption goods. Using the RBC Model,
Suppose that due to increased drug addiction in the United States, consumers' preferences shift toward more leisure and less consumption goods. Using the RBC Model, what are the impacts on the following outcomes(make no assumptions regarding the magnitudes of particular shifts of curves):
a) Output supply (increase / decrease / indeterminate / no change)?
b) Output demand (increase / decrease / indeterminate / no change)?
c) Output (increase / decrease / indeterminate / no change)?
d) Interest rate (increase / decrease / indeterminate / no change)?
e) Labor supply (increase / decrease / indeterminate / no change)?
f) Labor demand (increase / decrease /indeterminate / no change)?
g) Employment (increase / decrease / indeterminate / no change)?
h)Wages (increase / decrease / indeterminate / no change)?
i) Money supply (increase / decrease / indeterminate / no change)?
j) Money demand(with price level on vertical axis)(increase / decrease / indeterminate / no change)?
k) Price level(increase / decrease / indeterminate / no change)?
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