We expect positive supply shock to do to the real wage

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a) What would we expect a positive supply shock to do to the real wage? Employment? Explain.

b) The rate of growth in Canada's real GDP is expected to be only 2% next year. What do you predict will happen to the unemployment rate? Explain.

c) Suppose a firm current owns a profit-maximizing amount of capital. Now suppose the Bank of Canada increases interest rates. What would we expect to happen to the size of the capital stock? Explain.

Reference no: EM13887870

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