Consider an economy with the production function Y = L ^(1/3)
a) Derive the Labor demand Curve
b) If Labor supply curve is L^s = ( w/p ), calculate the equilibrium levels of real wage, labor and output.
c) Assume M^s = 45 and K = 3. What is the equation of the aggregate demand curve for this example? What is the price level? What is the nominal wage level?
d) Show equilibrium in labor market / output market / money market by using the graphical analysis of "The Complete Theory of Aggregate Demand and Supply"