Question

Consider an economy that abides by the standard classical model specifications. Suppose policy makers have decided to allow a large number of new immigrants to enter the country and join the workforce. Using graphs and written discussion, examine the economy dynamics in the wake of the shock.

Expectations are as follows: • Capture the timing in your written discussion • If a curve shifts, explain why/economic intuition Page 3 • If a market is in disequilibrium, explain how it returns to equilibrium • Explain, if possible, the final outcome in terms of important variables: Y, N, P, C, W P , W, r, S, P uS, P rS

Answer 1