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The whole model. Now let's put the labor and loanable funds markets together. This constitutes the whole real side of the neoclassical model. Suppose that
The whole model. Now let's put the labor and loanable funds markets together. This constitutes the whole real side of the neoclassical model. Suppose that COVID causes the supply of labor to fall, in other words, L decreases. Predict what will happen to the following:
a. the real wage
b. the real rental price
c. employment
d. Real income
e. The real interest rate
Draw graph and explain
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