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X Given the production function, Y = Aka[(1-@), w = 73 1, and LS = Bw - R. Suppose (STEP ONE) there is an increase

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X Given the production function, Y = Aka[(1-@), w = 73 1, and LS = Bw - R. Suppose (STEP ONE) there is an increase in on-the-job search (OJS). Suppose further (STEP TWO) that the OJS causes productivity (A) to rise. Assume that when the labor market is fully adjusted, unemployment is lower than in the original equilibrium. 4. Show this on GRAPH ONE. [Slopes never change. Label the graph clearly and completely.]

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