Question
Using the RBC Model, suppose that the value of equities (stock in companies) is included as a form of individual wealth that impacts the individual's
Using the RBC Model, suppose that the value of equities (stock in companies) is included as a form of individual wealth that impacts the individual's consumption / leisure decision. Suppose that equity prices are increasing. What are the implications on the following(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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