What would be the impact on the production function


Problem

A. If the real wage was 10 dollars per hour, what would happen in this market?

B. If labour productivity increases due to the purchase of new capital equipment, what would be the impact on the production function?

C. If labour productivity increases, what would be the impact on the aggregate labour market in terms of labour hours and the equilibrium real wage rates? What would be the impact on real GDP? Fully explain your answer.

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Macroeconomics: What would be the impact on the production function
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