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Labor Market Shock: Graphically show the impact of a positive labor supply shock. Include all three...

Labor Market Shock:

Graphically show the impact of a positive labor supply shock. Include all three markets: Labor, Product, Capital. Start with initial steady state. Show impact of shock in the initial market. Next show the propagation mechanism--how it carries over into the other two markets. Show at least one set of the feedback loop, Show the new steady state. Tips: Use one sheet of white paper-landscape orientation. Use colored pens/pencils.

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