Increase in unemployment benefits

Reference no: EM1374268

Assume that the unemployment profits provided through the private sector are raised permanently, please answer the following questions:

A) What will happen to Y (GDP), r (real interest rate), P(price level), and I(investment), in the short run?

B) What will happen to Y, r, P, and I, in the long run?

Reference no: EM1374268

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