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Suppose that there is a technological disaster that makes workers less productive than before. Assume that initially output is at its natural rate. Suppose that

Suppose that there is a technological disaster that makes workers less productive than before. Assume that initially output is at its natural rate.

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Suppose that there is a technological disaster that makes workers less productive than before. Assume that initially output is at its natural rate. a. How, if at all, does this aect the IA curve? b. How, if at all, does this aect the natural level of output 17? c. In light of your answers to (a) and (b), what is the immediate effect of the disaster on output and the real interest rate? (1. Can you tell how the long-run effect of the disaster on output compares with the short-run effect? Explain

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