homework4spring2008

homework4spring2008 - Economics 102 Spring 2008 Homework #4...

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Economics 102 Spring 2008 Homework #4 Due April 7, 2008 On your homework please include at the top of the first page your name, TA name, and the section number for the discussion section you attend. All homeworks should be legible and neat: do a professional looking job! 1. Long Run Growth Using a graph of a labor market and a graph of an aggregate production function, show and explain what happens in the situations below. Be sure to illustrate what happens to the quantity of labor, wage rate, output, and labor productivity. a) An epidemic wipes out a quarter of the labor force. b) The average level of education greatly increases. 2. The Loanable Funds Market Using the information below, graph the market for loanable funds. Measure the X-axis in millions of dollars of investment. Measure the Y-axis in percentage points (the interest rate). In the equations below r is the real interest rate and Q is the quantity of loanable funds. Assume the government initially has a balanced budget and that this is a closed
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homework4spring2008 - Economics 102 Spring 2008 Homework #4...

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