Question

1. Economic Growth a. Use a stylized graph to draw an aggregate production function (APF). (2...

1. Economic Growth

a. Use a stylized graph to draw an aggregate production function (APF).

b. Using a new stylized graph for each example show how the following would change the APF.

1. A decrease in the labour force participation rate (1 mark)

2. An increase in the capital stock of a country (1 mark)

3. A natural disaster that damaged critical infrastructure (1 mark)

c. Using a stylized graph, draw the labour market in equilibrium.

d. How will an increase in the capital stock, change the labour market equilibrium?

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